Intel to cut 12,000 jobs to turnaround

April 20, 2016

Intel said its first quarter revenue rose 7 percent to $13.7 billion and net income grew 3 percent to $2 billion in Q1 2016 as compared with Q1 2015.

Intel’s revenue fell 8 percent and net income dropped 43 percent as compared with Q4 2015.

Intel’s performance in main business

Intel said its revenue reached $7.5 billion (–14 percent sequentially and +2 percent year-over-year) from Client Computing, $4 billion (–7 percent sequentially and +9 percent y-o-y) from Data Center, $651 million (+4 percent sequentially and +22 percent y-o-y from Internet of Things, $557 million (–15 percent sequentially and –6 percent y-o-y from non-volatile Memory Solutions, $537 million +5 percent sequentially and + 12 percent y-o-y from Intel Security and $359 million from Programmable Solutions.

Intel to slash 12,000 jobs

Intel CEO Brian Krzanich announced the company’s decision to slash 12,000 jobs — approximately 11 percent of employees — by mid-2017.

Intel said it aims at site consolidations, voluntary and involuntary departures, and a re-evaluation of programs to save $750 million this year and annual run rate savings of $1.4 billion by mid-2017. The chipset company will record a one-time charge of approximately $1.2 billion in the second quarter.

The restructuring initiative is aimed at accelerating Intel’s evolution from a PC company to one that powers the cloud and billions of smart, connected computing devices.

Intel’s primary growth engines are data center and Internet of Things (IoT) businesses with memory and field programmable gate arrays (FPGAs) accelerating these opportunities. These growth businesses delivered $2.2 billion in revenue growth last year, and made up 40 percent of revenue and the majority of operating profit.

Intel plans to increase investments in the products and technologies that fuel revenue growth, and drive more profitable mobile and PC businesses. Intel plans to increase investments in its data center, IoT, memory and connectivity businesses, as well as growing client segments such as 2-in-1s, gaming and home gateways.