Intel is to cut 12,000 jobs worldwide as part of a major restructuring as the company moves away from focusing on PCs to Internet of Things technology.
Approximately 11 per cent of Intel’s global staff will be affected by the redundancies by mid-2017 as the world’s largest chipmaker consolidates its operations.
The restructuring has been motivated by a slowdown in the PC segment which the chipmaker wants to make up for by refocusing on high-growth areas such as connected-home technologies and cloud systems.
“The data centre and Internet of Things (IoT) businesses are Intel’s primary growth engines, with memory and field-programmable gate arrays accelerating these opportunities,” Intel said in a statement. “These growth businesses delivered $2.2bn (£1.5bn) in revenue growth last year, and made up 40 per cent of revenue and the majority of operating profit, which largely offset the decline in the PC market segment.”
Intel said the job cuts will be achieved by a combination of voluntary and involuntary layoffs that will be communicated to the majority of the affected employees within the next 60 days.
“These are not changes I take lightly. We are saying goodbye to colleagues who have played an important role in Intel’s success,” Intel CEO Brian Krzanich wrote in a letter to the firm’s employees.
“Today’s announcement is about accelerating our growth strategy. And it’s about driving long-term change to further establish Intel as the leader for the smart, connected world.”
Intel expects the restructuring program to deliver $750m in savings this year and annual run rate savings of $1.4bn by mid-2017. The company will record a one-time charge of approximately $1.2 billion in the second quarter.