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Intel Layoffs 2016: Wearable Group Staff Cuts Coming?

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Intel Corp. is preparing to lay off some or all of its wearables group, according to TechCrunch. The move, if true, shows just how difficult it is to productize, monetize and profit smart watches, smart eyeglasses and other technologies that push beyond traditional personal computing. It's also a potential setback for the consumer IoT market.

According to TechCrunch:

"Now, according to sources close to the company, Intel is planning to take a major step back from its investment in the space — or possibly even exit wearables altogether. The changes will include a large number of layoffs in NDG, along with the larger New Technologies Group into which it was folded back in April of last year — a move already viewed at the time by some as an early sign of Intel’s displeasure with its wearables division."

ChannelE2E could not reach Intel for comment.

NDG stands for New Device Group. It includes Basis, a smart fitness watch business that Intel acquired in 2014. Intel continued the M&A trend in 2015 when it acquired Recon, which makes wearable displays for active users like snowboarders.

Intel Wearable Layoffs: A Strategy Shift?

If the layoff rumors are true, this would be the latest in a growing list of job cuts at Intel this year. Amid mixed to weak performance in the PC market, the company has shifted resources to cloud and IoT computing. Intel has previously announced about 12,000 job cuts and layoffs in 2016.

Intel, like many established rivals and upstarts, initially had high hopes for the wearable market. The overall industry is expected to span 411 million smart wearable devices in 2020, representing $34 billion, CCS Insight has predicted. But that doesn't guarantee success for all players.

Among the recent reality checks: Revenues for Apple Watch, the highest-profile wearable device, have slumped since the devices launched in early 2015. Microsoft killed its Band wearable around September 2016. And Pebble cut staff earlier this year.

NoteTrack all technology industry layoff and job cut news here.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.