Santa Clara, California – Intel Corporation (NASDAQ: INTC) has announced on Tuesday a reduction of 11 percent of its employees within the next 60 days, and some others in 2017, due to a restructuring initiative that the company is promoting. The total of positions to be laid off are 12,000 jobs globally.
With the sunken demand for personal computers, which used to be the main area of revenue for the California-based company, Intel is aiming to accelerate its evolution from a PC company to one that specializes in powering the cloud and smart, connected computing devices, according to a press release.
Intel assured to be intensifying its focus in high-growth areas where it is positioned for long-term leadership, customer value and growth while making the company more efficient and profitable than its was before.
The layoff of the thousands of employees will be through site consolidations worldwide, a combination or voluntary and involuntary departures and the re-evaluation of programs, said Intel’s CEO Brian Krzanich in an email to the employees.
“These are not changes I take lightly. We are saying goodbye to colleagues who have played an important role in Intel’s success,” commented Krzanich. “We are deeply committed to helping our employees through this transition and will do so with the utmost dignity and respect.”
Intel is expecting that the changes and the new focus deliver $750 million in savings this year and annual rate savings of $1.4 billion by mid-2017. The world’s largest and highest valued semiconductor chip makers will record as well a one-time charge of approximately $1.2 billion in the second quarter.
Lower revenues
Worldwide shipments of personal computers have declined 9.6 percent in the first quarter of the year, making this the sixth consecutive year to show lower sales, according to market researcher IDC. This year’s numbers were the lowest since 2007.
For Intel, the decline showed its presence as well by making $7.5 billion in revenue during the last three months, which represented a decline of 15 percent from the preceding quarter. The numbers may give a hint about why the company is trying to refocus.
Moreover, the other business that Intel is trying to put its focus such as the data center and Internet of Things (IoT), represented a significant growth in its revenues of $2.2 billion in growth last year and made up 40 percent of the total revenues for the company.
Source: Intel