Intel to Lay Off 12,000 Workers As PC Industry Collapses

Intel has announced a new restructuring plan that involves laying off a total of 12,000 workers globally, as the company is trying to move focus from the ever-declining personal computing business.

Instead, Intel will invest more in the production of microchips for data centers and Internet-connected devices, as it has found that customers around the world are less interested in PCs these days.

Currently the world’s largest chipmaker, Intel is thus cutting 11 percent of its workforce, aiming to save a total of $1.4 billion (€1.2 billion) per year starting mid-2017.

“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 $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,” Intel states, trying to motivate its decision.

The job cut will extend into 2017 for smoother transition

The PC market collapsed 11.5 percent in the first quarter of the year, and many companies have already lowered their forecasts, expecting further drops in the coming quarters.

Intel’s CEO Brian Krzanich says in a letter to employees that the layoffs will be taking place gradually and will start with voluntary departures. All actions will be communicated in the next 60 days, but the layoffs will continue into 2017, as the company is seeking a smooth transition.

“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,” Krzanich explains.

The majority of Intel’s production facilities are located in the United States, but the company says that the layoffs will take place globally. It’s not yet known how many jobs in the US will be affected.