Intel cuts 11% of global workforce due to weak PC demand

Intel, the largest computer chipmaker in the world, announced on Tuesday that it would cut 11% of its global workforce, as they expect the PC market to decline significantly. The company aims to restructure and replicate the success across mobile devices that have now replaced traditional desktops and laptops.

The PC industry decline has also been felt by tech companies Hewlett Packard Co and Microsoft Corp. The new age of tech users globally would turn to their mobile devices for their computing needs,and corporations would increasingly rely on big machines than desktop models to run their businesses.

Intel bet heavily on the stability of the PC business years ago, its microprocessors dominating the PC industry until lately. In a press release, the company stated that it expects to save ₹5,067.57 crore ($750 million) this year and ₹9,459.46 crore ($1.4 billion) by the middle of next year from the mass layoffs and related expense reductions.

Most of Intel's factories are in the United States, although it did not identify where cuts would be focused geographically. Intel said most of the employees affected by the layoffs will be notified in the next 60 days, while some of the cuts will be carried out through mid-2017.

The tech giant 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% at ₹2,087.84 ($30.90) in extended trading.

On a per share basis, the company earned ₹28.38 (42 cents) per share, in the first quarter, up from ₹27.71 (41 cents) a year earlier.

Net revenue rose to ₹92,567.57 crore ($13.70 billion) from ₹86,351.35 crore ($12.78 billion).

The company's restructuring initiative aims to accelerate its evolution from a PC company to one that powers the cloud and smart, connected computing devices.

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

- Toni Urrutia