Intel Announces It Will Cut Global Workforce by 12,000

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Intel Corp. announced it will reduce its global workforce by 12,000 -- or 11 percent -- in an earnings call April 19, 2016. (Justin Sullivan/Getty Images)

Confirming speculation that had surfaced in news reports in the days leading up to its earnings report on Tuesday, Santa Clara-based Intel announced that it will cut its global workforce by 12,000 workers.

The company says the move is necessary to aid its transition to profitable new markets for its digital processors.

The company said the workforce reductions would involve "site consolidations worldwide" and both voluntary and involuntary departures. Most affected workers would be notified in the next 60 days, and the reduction in force is expected to be complete by the middle of next year.

The Oregonian was among the outlets that reported late last week that layoffs could be imminent.

Intel is Oregon's largest private employer, with a workforce there of nearly 20,000. The company employs 6,200 in Santa Clara and a similar number at its other major California campus in Folsom.

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The layoffs "are not changes I take lightly," Intel CEO Brian Krzanich said in an email to employees. "We are saying goodbye to colleagues who have played an important role in Intel’s success. We are deeply committed to helping our employees through this transition and will do so with the utmost dignity and respect."

Krzanich said the changes were part "accelerating our growth strategy" by responding to the global transition away from traditional PC computing toward cloud computing and smart, connected devices -- widely termed "the Internet of Things."

For Intel, that means building powerful processors to run the massive data centers that drive cloud computing on one hand, and on the other, continuing to create new lines of chips for everything from smartphones to smart watches.

Krzanich's message to employees said Intel is already seeing the payoff from investing in these areas.

"The data center and Internet of Things businesses are now Intel’s primary growth engines, and combined with memory and FPGAs [field-programmable gate array, or processor], form and fuel a virtuous cycle of growth," Krzanich wrote. "Together, these businesses delivered $2.2 billion in revenue growth last year, made up 40 percent of our revenue, and the majority of our operating profit."

As The Oregonian noted after a smaller, widely unreported layoff last year -- about 1,150 of the company's 46,000 U.S. employees -- Intel's global workforce has seesawed from a high of 99,900 in 2005 to 79,800 after the onset of the Great Recession, then back up to its current level of about 107,000.

Here's the AP's latest story on the Intel announcement:

By Brandon Bailey
AP Technology Writer

Intel says it will cut 12,000 jobs — about 11 percent of its workforce — as it reorganizes to confront a decline in sales of personal computers.

The chipmaker said the cuts will include "voluntary and involuntary departures" from its operations around the world. Most of the affected workers will be notified in the next 60 days.

Intel said the cuts will provide about $1.4 billion in annual savings by the time the cuts are completed next year.

The company, based in Santa Clara, California, is a leading supplier of computer chips, but PC sales have been declining steadily in recent years. It's trying to focus on its most profitable lines of business, which include making processors for data center computers and Internet-connected gadgets.