Intel to Cut 12,000 Jobs Amid Declining PC Market

intel-logoIntel has announced a major corporate restructuring that will see 11 percent of its workforce laid off as the company intensifies its focus on its data center and smart connected computing businesses.

The move is being billed as a profitable and efficient evolution of the company away from its traditional PC sector base toward more high-growth areas, broadly defined as its cloud-powering hardware and Internet of Things businesses. These areas reportedly made Intel $2.2 billion in revenue growth last year, making up 40 percent of its operating profit and offsetting its decline in the PC market.

Combined with its gaming, home gateway, memory and connectivity businesses, the initiative will fuel a "virtuous cycle of growth", said Intel, but the move comes at the cost of up to 12,000 jobs globally. The company said the layoffs will be completed by mid-2017 through a combination of voluntary and involuntary departures as it re-evaluates its programs and consolidates its sites worldwide.

Intel forecasts that the initiative will deliver $750 million in savings in 2016 and annual run rate savings of $1.4 billion by the middle of the following year.

While Intel's press release makes no mention of its latest microprocessor uptake in the PC market, the company did recently confirm the end of its highly successful decade-long "tick-tock" strategy of annually delivering new processors, after chip updates stretched beyond the yearly cycle in recent generations and began affecting Apple's product launch cycles. The launch of Intel's Kaby Lake 14-nm microarchitecture was delayed to the second half of 2016 after Skylake suffered similar setbacks in 2015.

Semiconductor foundries have had increasingly tough times creating smaller process nodes as fabrication of smaller transistors has become increasingly expensive and complex. Intel has said it will now move to a new "Process-Architecture-Optimization" model for its current 14-nm node and next-generation 10-nm node family of chips.

Tag: Intel


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37 months ago
Yikes. Hopefully these people get a humane severance package.
Rating: 9 Votes
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37 months ago
All the while lobbying for more foreign workers on H1-B visas. Smh.
Rating: 6 Votes
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37 months ago
Intel was strong ARMed to make that decision:p
Rating: 5 Votes
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37 months ago

It is the time Earth can no longer sustain over 7 billion people?


Huh? I'm missing the connection to the story.
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As tough as it is when people lose jobs, this is a great example of why our society doesn't work.

Firstly, Intel cut these jobs because the tick tock schedule no longer increases profit. They're still profitable just not as much. With the increase of computing power, Intel could produce chips that blow away what we're currently using. However this doesn't align with manufacturers product offerings, giving consumers enough time to recycle their products. Software, and consumer purchases operate at a slower pace now relative to hardware advances.

Secondly, due to the first, our world stinks. We continue to operate in a way to maximize profits and shareholder earnings versus advancing and changing how we do things. People lose jobs, aren't happy, and our home is being turned into a litter box.


Why do millions keep flocking to it if it's so terrible?
Rating: 4 Votes
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37 months ago
For a gigantic swath of the world's population, the only computer they really now use is their smart phone.

The motto has changed.
No longer is it "Intel Inside"
It's now "Arm Inside"
Rating: 4 Votes
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37 months ago

Intel is paying the price for the strategic mistake to ignore the smartphone and tablet markets.

*buzzer sound*

Their workforce is paying for it.

Glassed Silver:mac
Rating: 4 Votes
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37 months ago
Intel is paying the price for the strategic mistake to ignore the smartphone and tablet markets.
Rating: 3 Votes
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37 months ago

As tough as it is when people lose jobs, this is a great example of why our society doesn't work.


Why? Production fluctuation happened since the dawn of civilization. A little bit more than a century ago it meant to starve to death. Today it means being laid off.


Secondly, due to the first, our world stinks. We continue to operate in a way to maximize profits and shareholder earnings versus advancing and changing how we do things. People lose jobs, aren't happy, and our home is being turned into a litter box.


Employees work to maximize their profit and benefits also, unless they're complete idiots. Maximizing profits is what makes the whole thing move forward.
Rating: 3 Votes
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37 months ago

It is the time Earth can no longer sustain over 7 billion people?

BTW, because of the scale, could I suspect Intel is just trying to keep a good profit margin of their own products?


Because of that quest for profit, Intel was able to raise the capital that allowed them to grow the business in the first place.

Technologies get old and stale, and replaced by new technologies. This is called "progress." Personally, I think progress such as this is a good thing, although you may prefer the old technologies; that's your choice, although I don't really understand that. New companies, and jobs, appear to support the new technologies. This allows younger people who were not lucky enough to have been around when Intel started up to become employed in a growth situation.

I'm sure you are stuck in the idea that jobs should be for life and companies should mainly exist to provide employment. I won't try to dissuade you. But in your model of how things should be, there's not much reason to start the companies in the first place.
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As tough as it is when people lose jobs, this is a great example of why our society doesn't work.

Firstly, Intel cut these jobs because the tick tock schedule no longer increases profit. They're still profitable just not as much. With the increase of computing power, Intel could produce chips that blow away what we're currently using. However this doesn't align with manufacturers product offerings, giving consumers enough time to recycle their products. Software, and consumer purchases operate at a slower pace now relative to hardware advances.

Secondly, due to the first, our world stinks. We continue to operate in a way to maximize profits and shareholder earnings versus advancing and changing how we do things. People lose jobs, aren't happy, and our home is being turned into a litter box.


Interesting that you blame the problems of the world on the failure of Intel's tick tock cycle.

Intel is just one company. Companies are born, grow, fade, and die. Technologies age and get replaced by other technologies. I'm not sure why you would want to stop that. Certainly, if you are active on this site, chances are you enjoy the benefits of the newer emerging technologies.
Rating: 2 Votes
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37 months ago

The suits will for sure. Not sure about the rank and file though.

The Rank and File are the only ones I care about, they are after all the 99+% of the people working there.
Rating: 2 Votes
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