Transforming itself from a PC company, Intel in its latest restructuring process, announced to evolve the company in to an integrated internet of things (IoT) company, that powers the cloud and billions of smart, connected computing devices.
“The data center and Internet of Things (IoT) businesses are Intel’s primary growth engines, with memory and field programmable gate arrays (FPGAs) accelerating these opportunities – fueling a virtuous cycle of growth for the company,” the company said in a statement.
Last year these growth businesses delivered $2.2 billion in revenue growth, and made up 40 percent of revenue and the majority of operating profit, which largely offset the decline in the PC market segment.
“Our results over the last year demonstrate a strategy that is working and a solid foundation for growth, and the opportunity now is to accelerate this momentum and build on our strengths” said Intel CEO Brian Krzanich.
However, the restructuring will take a huge toll on its employees. The company announced to reduce the workforce by 11% handing over pink slips to around 12,000 employees globally.
“This will be informed to be employees in next 60 days,” the company added.
“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.”
With these layoff and restructuring, Intel expects the program to deliver $750 million in savings this year and annual run rate savings of $1.4 billion by mid-2017.
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. Through this comprehensive initiative, the company 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.