Intel will cut up to 12,000 positions globally by mid-2017, 11 per cent of its workforce, as part of a company restructure as it looks beyond the PC market.
In announcing the move, Intel has described it as “a restructuring initiative to accelerate its evolution from a PC company to one that powers the cloud and billions of smart, connected computing devices”.
It comes as Intel announced its first quarter results, posting revenue of $US13.7 billion, up 7 per cent year-on-year, and net income of US$2 billion, up 3 per cent year-on-year.
As reported by Bloomberg, on average analysts had projected revenue of US$13.8 billion.
Intel’s client computing group posted revenue of US$7.5 billion, down 14 per cent sequentially, yet up 2 per cent year-on-year.
Intel’s data centre group posted revenue of US$4 billion, down 7 per cent sequentially and up 9 per cent year-on-year, while its Internet of Things group posted revenue of US$651 million, up 4 per cent sequentially and up 22 per cent year-on-year.
Intel has forecast second quarter revenue of US$13.5 billion, plus or minus US$500 million. As reported by Bloomberg, according to data compiled by Bloomberg, this is below an average analyst estimate of US$14.2 billion.
Recent IDC data shows that the PC market slumped in the 2015 first quarter, with shipments declining 11.5 per cent year-on-year, while Gartner recorded a 9.6 per cent decline.
Announcing its restructure, Intel stated its data centre and Internet of Things businesses are its “primary growth engines”.
“These growth businesses delivered $2.2 billion 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 stated.
Intel will “increase investments in the products and technologies that that will fuel revenue growth, and drive more profitable mobile and PC businesses”.
“Through this comprehensive initiative, the company plans to increase investments in its data centre, IoT, memory and connectivity businesses, as well as growing client segments, such as 2-in-1s, gaming and home gateways,” Intel stated.
The reduction of up to 12,000 positions will take place through site consolidations worldwide, a combination of voluntary and involuntary departures, and a reevaluation of programs, with Intel stating that the majority of actions will be communicated to affected employees over the next 60 days, with some spanning in to 2017.
