Intel has announced a restructuring plan to “speed its transition to a company that powers the cloud and billions of smart, connected computing devices”.
Unfortunately, this plan will result in roughly 11% of the global workforce, or 12 000 employees, being laid off by the middle of 2017.
“The majority of these actions will be communicated to affected employees over the next 60 days with some actions spanning in to 2017,” the company said in a press release.
“Intel expects the program to deliver US$750-million in savings this year and annual run rate savings of US$1.4-billion by mid-2017. The company will record a one-time charge of approximately US$1.2-billion in the second quarter,” the company added.
Intel explained that the restructuring plan will accelerate its move from being a PC company to one that focuses on data centres and the Internet of Things (IoT).
“These growth businesses delivered US$2.2-billion in revenue growth last year, and made up 40% of revenue and the majority of operating profit, which largely offset the decline in the PC market segment.”
The company said it planned to increase its investments in the data centre and IoT segments, as well as in the memory and connectivity businesses. However, it also added that consumer segments such as gaming, two-in-ones and home gateways would see investment as well.
In an email to employees, Intel CEO Brian Krzanich said that the decision wasn’t an easy one to make.
“These are not changes I take lightly. We are saying goodbye to colleagues who have played an important role in Intel’s success. We are deeply committed to helping our employees through this transition and will do so with the utmost dignity and respect.”
The news also comes just a few days after the company announced its Apollo Lake platform to strengthen entry-level PCs.