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Intel to slash up to 12,000 jobs in restructure

Wednesday, 20 Apr 2016 06:18:36

Chief executive Brian Krzanich said Intel's strategic transformation is progressing well. (AFP: Ethan Miller)

Intel will cut up to 12,000 jobs worldwide as it seeks to shake up its business to reduce dependence on the slumping personal computer market, the US tech giant said on Tuesday.

Intel, known for its role as the leading PC chipmaker, has in recent years been seeking to shift to mobile and emerging technologies such as healthcare, wearables and other connected devices.

Internet of Things

  • Internet of Things (IoT) is a computing concept that describes a future where everyday physical objects will be connected to the Internet and be able to identify themselves to other devices.
  • IoT is significant because an object that can represent itself digitally becomes something greater than the object by itself.
  • IoT describes a world where just about anything can be connected and communicate in an intelligent fashion.
Source: Techopedia

The restructuring will eliminate about 11 per cent of the Intel workforce by mid-2017 and aims to "accelerate evolution from a PC company to one that powers the cloud and billions of smart, connected computing devices," the California group said in a statement.

Intel shares fell 2.5 per cent in after-hours trade on the news to $31.60.

"Our results over the last year demonstrate a strategy that is working and a solid foundation for growth," chief executive Brian Krzanich said.

"The opportunity now is to accelerate this momentum and build on our strengths. These actions drive long-term change to further establish Intel as the leader for the smart, connected world."

Intel made the announcement as it reported a modest 3 per cent rise in first-quarter profit to $2 billion, with revenues growing 7 per cent to $13.7 billion.

"Our first-quarter results tell the story of Intel's ongoing strategic transformation, which is progressing well and will accelerate in 2016," Mr Krzanich said.

Intel will be increasing investments in key growth areas, which include the range of smart home and other connected devices known as the "Internet of Things", as well as its data centre and computer memory operation.

Mr Krzanich has spoken frequently about the shift in computing, and laid out his vision more than a year ago, telling the Consumer Electronics Show the industry would be "unleashed" by wearables.

"So computing becomes unwired, and everything becomes smart and connected," he said at the time.

Intel said the job cuts will come from "a combination of voluntary and involuntary departures," and a re-evaluation of its global operations.

Intel will set aside $1.2 billion to cover the costs of the job reductions, and expects the program to save $750 million this year and $1.4 billion by mid-2017.

The company said chief financial officer Stacy Smith would "transition to a new role leading sales, manufacturing and operations once his successor is in place."

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