Intel to shed its PC image, is restructuring itself solidly into the datacentre and IoT
- Intel to restructure with 12,000 job losses worldwide
- Wants to move away from the old PC - concentrate on data centre and IoT
- Process completed by 2017
Chip-maker Intel Corporation has announced a big restructuring initiative as it adjusts itself to a world where the PC - for the last 30 years the upcoming and then dominant ‘form factor’ and Intel’s chips with it - is no longer in the growth seat.
Multiple market reports for at least the past year have been showing a PC market in decline as users find other screens to stare into. The smartphone and tablet markets have been joined by the so-called ‘2 in 1’ hybrid tablet with keyboard arrangements. All of these devices are thin and mobile and have low-powered chips in them by necessity, an area in which Intel, while certainly present, has not been dominant.
As a result it has decided to make a dramatic adjustment to calm the markets and galvanise its troops. It says it intends “to accelerate its evolution from a PC company to one that powers the cloud and billions of smart, connected computing devices.”
In other words it will shed some of its PC people and double down on its two other growth markets. One of these is in the data centre where its increasingly powerful x86 processors still drive huge numbers of servers and will also soon power much of the telecoms industry as it transitions to network functions virtualisation (NFV).
The other area, of course, is everyone’s favourite, IoT. Here again huge growth is expected and Intel has laid plans to grow with it.
Intel claims these two growth areas already accounted for $2.2 billion of its revenue growth last year and made up 40 per cent of its revenue and the majority of its operating profit. That largely offset the dip in PC processor sales. Clearly if the global population stops processing on one platform it’s only to turn its attention to another - in this case, the cloud.
The pain: Intel says its restructuring will result in the reduction of up to 12,000 positions globally - approximately 11 per cent of employees - by mid-2017 through site consolidations, a combination of voluntary and involuntary departures, and a re-evaluation of its various programmes.
The gain: the plan is expected to deliver $750 million in savings this year and annual run rate savings of $1.4 billion by mid-2017. The company will record a one-time charge of approximately $1.2 billion in the second quarter of this year.
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