Intel to cut 12,000 jobs or 11% of workforce globally

Intel has said it would cut 12,000 jobs globally, or 11 percent of its workforce, as the company moves away from its traditional business of selling chips used in personal computers.

The world’s largest chipmaker - and one of Ireland’s largest multinational employers - also 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. The company did not announce how the cuts would affect the different locations where it operates.

The company employs more than 4,500 people in Ireland. A spokesman in Ireland said tonight that there was no information available at this stage on the likely impact on the Irish workforce. The company has said it will tell affected employees within 60 days.

Intel’s shares were down 2.6 percent at $30.78 in extended trading.

The Santa Clara, California-based company has been focusing on its higher-margin data centre business as it looks to reduce its dependence on the slowing PC market.

Global personal computer shipments fell 11.5 percent in the first quarter, IDC said on Monday. The research firm anticipates a relatively weak environment in the first half of 2016.

Intel has invested massively in chip production in Ireland . In 2014 the company announced that it had invested more than €3.5 billion in upgrading its Leixlip plant over the previous three years.The California-based company said it would increase investments in its data centre, Internet of Things, cloud and connectivity businesses.

Intel said it would record a pretax restructuring charge of $1.2 billion in the second quarter. On a per share basis, the company earned 42 cents per share, in the first quarter, up from 41 cents a year earlier.Net revenue rose to $13.70 billion from $12.78 billion.Up to Tuesday’s close, Intel’s shares had fallen 8.4 percent this year, compared with a slight gain in the broader semiconductor index.

The company also said on Tuesday Chief Financial Officer Stacy Smith will move to a new role leading sales, manufacturing and operations. Intel said it would begin a formal search process for a successor.

“These actions drive long-term change to further establish Intel as the leader for the smart, connected world,” chief Brian Kraznich added. “I am confident that we’ll emerge as a more productive company with broader reach and sharper execution.”

For the current quarter, the company expects sales in the range of $13.5bn “plus or minus $500million”, against analysts’ forecasts for $14.2 billion.

The company has also seen change in its upper echelons with some of its top veterans exiting the company earlier this year including, Kirk Skaugen, the former head of the PC and mobile division who was once considered to be a potential contender for the chief executive position. Intel chief Brian Kraznich’s decision to tap Qualcomm’s Murthy Renduchintala last year has raised concerns about more upheaval.

Intel shares have declined nearly 13 per cent since the beginning of last year.

Reuters/Financial Times: additional reporting Irish Times business staff