Intel to streamline operations to accelerate transformation

Chip-maker embarks on transition that will see it power the cloud and billions of smart, connected computing devices

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Intel to streamline operations to accelerate transformation Krzanich says these actions will drive long-term change to further establish Intel as the leader for the smart, connected world.
By  Manda Banda Published  May 19, 2016

Chip designer, Intel Corporation has announced a restructuring initiative to accelerate its evolution from a PC company to one that powers the cloud and billions of smart, connected computing devices.

The company said it will intensify its focus in high-growth areas where it is positioned for long-term leadership, customer value and growth, while making the company more efficient and profitable.

According to the vendor, the data centre and Internet of Things (IoT) businesses are Intel's primary growth engines, with memory and field programmable gate arrays (FPGAs) accelerating these opportunities, fuelling a virtuous cycle of growth for the company.

These growth businesses delivered $2.2bn in revenue growth last year, and made up 40% of revenue and the majority of operating profit, which largely offset the decline in the PC market segment.

The restructuring initiative was outlined in an e-mail from Intel CEO Brian Krzanich to Intel employees.

"Our results over the last year demonstrate a strategy that is working and a solid foundation for growth," said Krzanich. "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."

While making the company more efficient, Intel plans to increase investments in the products and technologies that that will fuel revenue growth, and drive more profitable mobile and PC businesses.

These changes will result in the reduction of up to 12,000 positions globally - approximately 11% of employees - by mid-2017 through site consolidations worldwide, a combination of voluntary and involuntary departures, and a re-evaluation of programs. The majority of these actions will be communicated to affected employees over the next 60 days with some actions spanning in to 2017.

Intel expects the programme to deliver $750m in savings this year and annual run rate savings of $1.4bn by mid-2017. The company will record a one-time charge of approximately $1.2 billion in the second quarter.

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