Intel To Cut Thousands Of Jobs As PC Sales Collapse Worldwide
Intel, the world’s largest manufacturer of microprocessors, announced today that it will be laying off around 11 percent of its workforce worldwide as part of a “restructuring” effort to fend off the declining cost of consumer PCs.
According to TechCrunch, the Intel will lay off about 12,000 workers worldwide in the coming year after sales figures for consumer PCs declined over the last few years. Intel characterizes the layoffs as part of its effort to “restructure” in order to “accelerate” the company’s “transformation.” The massive internal restructuring and layoffs at Intel are slated to start off immediately, reports OregonLive.
“These actions drive long-term change to further establish Intel as the leader for the smart, connected world. I am confident that we’ll emerge as a more productive company with broader reach and sharper execution,” said Intel chief executive Brian Krzanich in a written statement.
Intel missed the mobile revolution. Now it faces its day of reckoning.: The company could announce mass layoff… https://t.co/PNEmQxFxau
— BambiPi (@WeBambi) April 19, 2016
According to Intel, individuals who will be losing their jobs will be notified in the next 60 days, with the internal restructuring slated to finish up in the middle of next year. Intel’s massive job cutting measure is all a part of the company’s new strategy to pivot away from PC processor manufacturing and toward the “internet of things” and data center operations.
“The data center and internet of things businesses are Intel’s primary growth engines. These growth businesses delivered $2.2 billion in revenue last year and made up 40 percent of revenue and the majority of operating profit,” said Intel in a statement released today ahead of the announcement of massive layoffs at the chip manufacturer.
According to USA Today, Intel’s plan to lay off 11 percent of its workforce comes as the company has seen declining sales in the PC market over the last couple years, leading the company to look at other business opportunities – including their thriving data center business. The layoffs, Intel says, will accelerate its evolution from a PC company providing processors for laptops and desktops, into a company that is more focused on cloud computing and data storage.
“I am confident we’ll emerge as a more productive company with broader reach and sharper execution,” said chief executive Brian Krzanich in an email to employees today.
According to USA Today, the move could be an important one for Intel’s future, as the company has seen a significant drop in PC sales over the last few years, and a sharp decline in the first quarter of 2016, around 10 percent. Intel will, of course, still be the processing powerhouse it always has been, providing microprocessors for millions of computers worldwide, but the restructuring efforts appear to be about defraying the potential harm that declining PC sales can do to Intel as a whole.
“PC shipments dropped below 65 million units for the first time since 2007,” said Mark Hung, an analyst with Gartner, speaking with USA Today.
The decline in PC sales worldwide has hurt Intel’s bottom line, and in a move to become a more diversified company, Intel’s massive layoffs announce today will be the first step in the company’s ‘transformation’ into more than just the world’s largest manufacturer of microprocessors.
“It’s been a long time since there’s been a restructuring of the company. As they forge forward, they need to pare down and invest in the right area. As much as I hate that, it’s terrible for people who are laid off, for investors it’s positive,” said Betsy Van Hees, an analyst speaking with USA Today.
The move isn’t good news for the 12,000 or so employees who will be laid off later this year, but according to Van Hees and other industry experts, it’s a good move in the long run for Intel – even if the announcement of the layoffs today did cause a dip in the chip manufacturer’s stock price.
[Photo by Sean Gallup/Getty Images]
