Intel is cutting 12,000 jobs as part of a "restructuring initiative" aimed at speeding its transition "from a PC company to one that powers the cloud and billions of smart, connected computing devices."
The chip giant said the reductions will affect approximately 11 percent of employees worldwide. Intel plans to complete the layoffs by mid-2017 through "a combination of voluntary and involuntary departures, and a re-evaluation of programs." Most employees getting a pink slip will know within the next 60 days, though some cuts will take place in 2017. Intel said it expects the cuts to deliver $750 million in savings this year and annual run rate savings of $1.4 billion by mid-2017.
"These are not changes I take lightly," Intel CEO Brian Krzanich wrote in an email to employees today. "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 said the company's data center and Internet of things businesses are now its primary "growth engines." Together, these businesses delivered $2.2 billion in revenue growth last year, and made up 40 percent of the company's revenue as well as the majority of its operating profit.
"Our results over the last year demonstrate a strategy that is working and a solid foundation for growth," Krzanich wrote. "The opportunity now is to accelerate this momentum and build on our strengths.
"These actions drive long-term change to further establish Intel as the leader for the smart, connected world," he added. "I am confident that we'll emerge as a more productive company with broader reach and sharper execution."