Intel CEO Brian Krzanich today announced the company’s decision to cut 12,000 jobs globally — approximately 11 percent of employees — by mid-2017.
Intel aims at site consolidations, voluntary and involuntary departures, and re-evaluation of programs to save $750 million this year and annual run rate savings of $1.4 billion by mid-2017. The chipset company will record a one-time charge of approximately $1.2 billion in the second quarter to eliminate 12,000 jobs globally.
The restructuring initiative is to accelerate Intel’s evolution from a PC company to one that powers the cloud and billions of smart, connected computing devices.
Intel’s primary growth engines are data center and Internet of Things (IoT) businesses with memory and field programmable gate arrays (FPGAs) accelerating these opportunities. 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.
“These actions drive long-term change to further establish Intel as the leader for the smart, connected world,” said Krzanich.
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 US-based technology company plans to increase investments in its data center, IoT, memory and connectivity businesses, as well as growing client segments such as 2-in-1s, gaming and home gateways.
Intel earnings in Q1
Intel achieved 7 percent growth in revenue to $13.7 billion and 3 percent growth in net income to $2 billion in the first quarter of 2016 as compared with Q1 2015. But Intel’s revenue fell 8 percent and net income dropped 43 percent as compared with Q4 2015.
Intel’s main business
Intel generated revenue of $7.5 billion (–14 percent sequentially and +2 percent year-over-year) from Client Computing, $4 billion (–7 percent sequentially and +9 percent y-o-y) from Data Center, $651 million (+4 percent sequentially and +22 percent y-o-y from Internet of Things, $557 million (–15 percent sequentially and — 6 percent y-o-y) from Intel Security and $537 million (+5 percent sequentially and +12 percent y-o-y) from Non-Volatile Memory Solutions.