SANTA CLARA, Calif., April 19 (UPI) — Computer chip maker Intel announced Tuesday a major restructuring plan that will lead to the loss of about 12,000 of its jobs worldwide, the company said.
Intel said the initiative is part of the company’s overall plan to transition from a PC-related business to a technology firm primarily involved in cloud-based computing.
The reduction in employees, which will amount to about 11 percent of its global workforce, is expected to have the greatest impact in the Portland, Ore., area, where Intel has six campuses.
“Our opportunity now is to accelerate our momentum and build on our strengths. But this requires some difficult decisions,” CEO Brian Krzanich said in an email to Intel employees Tuesday. “Today we are announcing a restructuring initiative that will allow Intel to intensify our investments in the products and technologies that fuel our growth, and drive more profitable mobile and PC businesses.
“We expect that this initiative will result in the reduction of up to 12,000 positions globally. This will be achieved by voluntary and involuntary departures, global site consolidation, and efficiency initiatives. The majority of these actions will be communicated over the next 60 days, with some spanning into 2017.”
Intel said half of the layoffs, about 6,000, will be complete by the end of this year and account for a savings of $750 million in 2016.
The announcement came just hours after Intel reported its earnings for Q1 2016, which beat analysts’ expectations.
“Our first-quarter results tell the story of Intel’s ongoing strategic transformation, which is progressing well and will accelerate in 2016,” Krzanich said. “We are evolving from a PC company to one that powers the cloud and billions of smart, connected computing devices.”
Intel reported a profit of $2.05 billion, or 42 cents a share, for the quarter — up $60 million from a year ago. Company shares (Nasdaq: INTC) fell 2 percent in after-hours trading Tuesday.
