© alexey utemov Components | April 20, 2016

Mass layoffs awaits at Intel – 12'000 positions at risk

American chip giant Intel will start a new restructuring initiative to accelerate its shift from a PC company to one that powers the cloud and the smart connected world – but that transformation comes with the reduction of up to 12'000 positions globally.
In a press release, Intel states that it will intensify its focus in high-growth areas where it is positioned for long-term customer value and growth.

The data center and Internet of Things (IoT) businesses are Intel’s primary growth engines, with memory and field programmable gate arrays (FPGAs) accelerating these opportunities – fueling a virtuous cycle of growth for the company. These growth businesses delivered USD 2.2 billion in revenue growth last year, and made up 40 percent of revenue and the majority of operating profit, which largely offset the decline in the PC market segment.

The new restructuring initiative – which will result in reduction of about 11% of the company's workforce – was outlined in an e-mail from Intel CEO Brian Krzanich to Intel employees.

“Our results over the last year demonstrate a strategy that is working and a solid foundation for growth,” said Krzanich. “The opportunity now is to accelerate this momentum and build on our strengths.

While making the company more efficient, Intel plans to increase investments in the products and technologies that that will fuel revenue growth, and drive more profitable mobile and PC businesses. The company plans to increase investments in its data center, IoT, memory and connectivity businesses, as well as segments such as 2-in-1s, gaming and home gateways.

These changes will result in the reduction of up to 12'000 positions globally — approximately 11% of employees — by mid-2017 through site consolidations worldwide, a combination of voluntary and involuntary departures, and a re-evaluation of programs.

The company expects the program to deliver USD 750 million in savings this year and annual run rate savings of USD 1.4 billion by mid-2017.
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