So the rumours were true after all. Intel has announced a massive job cut that will land almost 11 percent of its workforce out on the streets. The announcement comes barely a week after reports that something of this nature was brewing.
The move comes despite the company continuing in substantial profit. While the company has chosen to paint the layoffs behind words like restructuring and transformation, the fact remains that almost 11,000 people are soon going to land in a whole lot of trouble — I mean who expects layoffs of this size when they are working for a decades old company that is continuously raking in profits?
Speaking on the topic, Intel CEO Brian Krzanich said,
Acting now enables us to increase our investments in areas that are critical for our future success. This is a comprehensive initiative. We will emerge as a more collaborative, productive company with broader reach.
These critical areas may also be read as acquisitions. In fact, Intel’s recent string of high cost acquisitions is being cited as one of the potential reasons behind these layoffs. The company is hoping to ease up some of the pressure on its capital by removing the human assets it thinks it can do without.
Intel has other reasons as well. PC chips have always been the company’s chief forte, however in a time and age when people are making the switch to mobiles and tablets, Intel — whose major revenue comes from PCs — is not doing all that well.
And the situation is expected to worsen. As PC sales continue to drop further, Intel will be facing pressure in ever increasing amounts and while the company is trying — and in part succeeding — in focusing upon and deriving business from the mobile segment, the process will take some time.
In the meantime, this layoff can probably be seen as Intel taking preliminary measures to ward against a situation that is yet to come.
Commenting on the topic, the CEO said,
We’ve talked about this transformation where we are moving from a client-centric [model] to a company that focuses more and more on a broader set of products — the cloud and all the connected devices that connect to that cloud and the connectivity that brings those devices to the cloud. That includes the PC but it’s much more than that.
This basically points towards Intel’s attempts to get into the cloud and Internet of thins niche, which although in a nascent phase, are increasingly being hailed as the tech of the future.
Meanwhile, we sympathize with the almost 11,000 people who have been laid off and hope that the company’s sudden move wont have further repercussions on the economy of the area, particularly Oregon — tied up as it is within the state’s economic infrastructure.
The employees being downsized will he informed within a 60 day period. The company said that the reductions will also be completed by the mid-2017. Meanwhile, the layoffs dont seem to be particularly affecting India.