Amid stumbles into the PC market, Intel Corp has recently announced 12000 layoffs globally. The chip giant is aiming to helm into data center and IoT segment evading from the ongoing PC market turmoil. A significant 11 percent cut-off of its work force came as mobility drives the consumer and enterprise demand.
According to IDC reports, global personal computer shipments sank 11.5 percent in the first quarter.
Intel, the world’s largest chipmaker, lowered its revenue forecast for the year. It now expects revenue to rise in mid-single digits, down from its previous forecast of mid- to high-single digits.
Intel’s shares were down 2.2 percent at $30.90 in extended trading.
Though concentrative dialogues were not shared on where the lay-offs will be made from Intel’s mammoth empire asserting that would record a pretax restructuring charge of $1.2 billion in the second quarter and expected annual savings of $1.4 billion per year starting mid-2017.
The company also said Chief Financial Officer Stacy Smith will move to a new role leading sales, manufacturing and operations. Intel said it would begin a formal search process for a new CFO.
“PC demand, at least in the eyes of Intel, is expected to be weaker than the industry originally anticipated,” said Angelo Zino, an equity analyst at S&P Capital Global Market Intelligence.
He added that although the industry has already seen some of the weakness experienced by Intel, the company’s comments dashed any hope of recovery.
Intel said in a statement the job cuts would be carried out by mid-2017 and the restructuring would “accelerate its evolution from a PC company to one that powers the cloud and billions of smart, connected computing devices.”
Raymond James analyst Hans Mosesmann, who rates Intel “under perform” said the problems leading to the job cuts were likely more about Intel than the broader tech industry.
“The bigger issue is the restructuring and will it be enough for the company to properly adapt to a changing environment where cloud and IoT competitive dynamics are quite different,” Mosesmann added.