Bowing down to low PC sales, the world’s largest chipmaker Intel is shifting gear from their traditional business towards cloud and connected devices. The company has decided to reduce its global workforce by 12000 about 11%, and half of the job cut would be completed by the end of 2016.
In an email to employees, CEO Brian Krzanich said, “I am confident that we’ll emerge as a more productive company with broader reach and sharper execution.”
On Tuesday, Intel also announced that current the CFO Stacy Smith will be taking on a broader new role within Intel, moving to lead sales, manufacturing and operations. The company will conduct a search for a new CFO, Krzanich said.
Because the shift is going to be “very, very difficult for the employee base,” CFO Stacy Smith, in an interview with USA TODAY, declined to say where the majority of the layoffs would occur.
The company employs approximately 110,000 globally and according to Intel these layoffs , also including senior executive roles, will help in saving about $750 million in 2016 and an annual run-rate savings of $1.4 billion by mid-2017.
The new focus area for Intel is its data centre and Internet of Things (IoT) businesses – termed as the primary growth engines. The company had said in 2014 it planned to reduce its global workforce by about 5 percent, or more than 5,000 positions, as it struggled with falling personal-computer sales and shifted focus to faster-growing areas.