Intel Will Lay Off 12,000 Employees

Chip giant eliminates 11% of its workforce as it escapes the dwindling PC market

Intel has announced it is undergoing a massive restructuring and will lay off 12,000 workers (11% of its total workforce). Most of the layoffs will occur in the next two months, with some continuing until mid-2017.

The changes reflect a changing emphasis within the company as it transforms from its focus on PC chips and realigns around the emerging cloud and Internet of Things markets. The company will also increase its investment in the “memory and connectivity businesses, as well as growing client segments such as 2-in-1s, gaming, and home gateways.”

Intel expect the cuts will save $750 million in 2016, with savings of up to $1.4 billion by mid-2017. The company's PC business remains profitable, but Intel executives are aware of dwindling sales and want to stay ahead of the curve. The company does not seem especially interested in mounting a challenge to the ARM chip for control of the mobile computing sector, but Intel dominates the data center with its large and powerful processors for large, high-performance systems. The Internet of Things field does not really have a dominant player so far, but Intel doesn't want to miss the chance to land in the middle of the action.

As Intel CEO Brian Krzanich explains in a message to Intel employees, “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.”