Channel technologies, Distributed Workforce

Intel Layoffs 2016-2017: 12,000 Job Cuts, 11% Positions Eliminated

Former CEO Brian Krzanich
Brian Krzanich

Intel Corp. plans to cut 12,000 positions -- an 11 percent worldwide staff layoff. Most of the Intel layoffs will occur in Q2 2016, but some staff and headcount reductions won't be completed until 2017.

Rumors about the Intel layoffs surfaced a few days ago. Official word came when Intel announced Q1 2016 results today. The company's overall Q1 2016 financial results were better than Wall Street expected, as revenues rose 7 percent to $13.7 billion. But red flags emerged when Intel described a lower-than-anticipated Q2 2016 outlook. Frankly stated, the PC market is performing worse that the company and market forecasters predicted, Intel said.

In response, CEO Brian Krzanich says the company is “evolving from a PC company to a company that powers the cloud and billions of smart connected and computing devices."

To help move Intel forward, the company has promoted CFO Stacy Smith, who will "transition to a new role at the company, leading sales, manufacturing and operations once his successor is in place." Smith will maintain in the CFO role until a financial successor is found. By the way, Smith was CIO earlier in his career -- so he has a hands-on feel for enterprise customers' business and technology needs.

For its Q1 2016, Intel reported:

  • Client Computing Group revenue of $7.5 billion, down 14 percent sequentially and up 2 percent year-over-year
  • Data Center Group revenue of $4.0 billion, down 7 percent sequentially and up 9 percent year over-year
  • Internet of Things Group revenue of $651 million, up 4 percent sequentially and up 22 percent year-over-year
  • Non-Volatile Memory Solutions Group revenue of $557 million, down 15 percent sequentially and down 6 percent year-over-year
  • Intel Security Group revenue of $537 million, up 5 percent sequentially and up 12 percent year-over-year
  • Programmable Solutions Group revenue of $359 million, which does not include $99 million of revenue as a result of acquisition-related adjustments.

Intel also has had turnover in its executive ranks. Senior VPs Kirk Skaugen (PC and mobile chip sales) and Doug Davis (IoT chip sales) are leaving the company, Intel confirmed earlier this month. A third alleged departure, potentially involving VP Aicha Evans (smartphone chips), has generated speculation within IT media circles. Some folks wonder if Venkata “Murthy” Renduchintala’s arrival from Qualcomm in November 2015 triggered multiple Intel departures.

But ultimately, Intel's biggest challenge involves market swings away from PCs and toward a mobile-, IoT and cloud-centric world.

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.