Intel Announces Restructuring Initiative, Cutting 12,000 Jobs

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Intel just announced that it is laying off 12,000 employees globally by mid-2017. In an email to employees, Intel's CEO Brian Krzanich said the company is evolving from being a PC company to a more efficient company that powers the cloud, IoT, and billions of smart, connected computing devices.

Intel Corporation today announced a restructuring initiative to accelerate its evolution from a PC company to one that powers the cloud and billions of smart, connected computing devices. Intel will intensify its focus in high-growth areas where it is positioned for long-term leadership, customer value and growth, while making the company more efficient and profitable. The data center and Internet of Things (IoT) businesses are Intel’s primary growth engines, with memory and field programmable gate arrays (FPGAs) accelerating these opportunities – fueling a virtuous cycle of growth for the company. These growth businesses delivered $2.2 billion in revenue growth last year, and made up 40 percent of revenue and the majority of operating profit, which largely offset the decline in the PC market segment.
 
>Building an even more massive infrastructure with far more tech gear involved
>Cutting 12K jobs

Does not compute

Watch them pay the current IT guys half pay under threat of being fired if they complain once while the CEO's get an even bigger bonus
 
Revenue and profit shouldn't be important. What really matters is how diverse the company is. Is it getting diverser? If so, it's improving.
 
Having left Intel during a layoff in 2002 I found that Intel generally treated their employees very well. My package was close to a year's pay. I suspect there are opportunities for some with companies like NVidia and AMD. Others can move into new industries like I did. Intel still looks good on a resume and offers great experience and seasoning for their employees. As painful as these shifts are, I think this is the right move. Hopefully they have the right CEO to pull it off.
 
Intel has been charging around the same price ($300 avg. for consumer level processors) for almost two decades going from memory of frequent processor purchasing dating back to 80386. It is just sad to see people getting laid off at a prospering corporation but it is one of the best way to bring in new talents and getting rid of dead weights. Jobs are getting much harder to come by due to automation and then the haves also continue to demand higher profits to boost their stocks. Unmotivated kids simply have a tough road ahead of them. That is the worried bordering on panic comment from a close friend where one of his high school kid is a directionless lazy bum.
 
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This is what happens when you continually make products that aren't noticeably superior to existing products. If there is no need to upgrade, you don't get those repeat sales.

I used to upgrade my CPU every two years. My last CPU lasted 7 years. I expect at least 4 more out of my Haswell chip.
 
Daniel_Chang said:
This is what happens when you continually make products that aren't noticeably superior to existing products. If there is no need to upgrade, you don't get those repeat sales.

I used to upgrade my CPU every two years. My last CPU lasted 7 years. I expect at least 4 more out of my Haswell chip.
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Indeed. Intel needs to get back to making products that are exciting for both enthusiasts and regular consumers alike. The mainstream platform is LONG overdue for a bump to 6 or 8 cores and the so-called high end HEDT platform needs to be made to be truly high end by being feature rich and by offering the best available parts, not afterthought rejectamenta from the server line. I'm hoping that the i7-6950X is the first step toward this. Intel needs to create exciting products like Skulltrail was...giving us their best products and not resting on their laurels like they have been doing for the last 5 years. The decline of the PC market is their own damn fault...and now they're getting rid of many employees (with families and obligations) to compensate for the effects of their neglect of the PC market.
 
lutjens said:
The decline of the PC market is their own damn fault...and now they're getting rid of many employees (with families and obligations) to compensate for the effects of their neglect of the PC market.
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I don't think it's anywhere near this simple. Clearly today's era of personal computing is much different than that which started the PC revolution that I'd say started in the mid 1980s. The x86 PC was the center of the computing universe for two decades and then the world went mobile and like Microsoft, Intel didn't do what it needed to do to adapt to the new market. Faster and faster power hungry non-mobile devices just isn't what drives computing today.
 
That is a lot of experience, talent, and educated people to be loosing. I wonder how deeply it will affect the rest of Intel's operation.

And, well, I guess it's also a hiring buffet for their competition.
 
heatlesssun said:
I don't think it's anywhere near this simple. Clearly today's era of personal computing is much different than that which started the PC revolution that I'd say started in the mid 1980s. The x86 PC was the center of the computing universe for two decades and then the world went mobile and like Microsoft, Intel didn't do what it needed to do to adapt to the new market. Faster and faster power hungry non-mobile devices just isn't what drives computing today.
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Mobile devices have comtributed to the decline of PCs, but Intel has accelerated this decline. Offering the same old thing year after year, no doubt justifying their malaise with the argument that they're already the performance leader. If people are comtinually offered the same thing, they're unlikely to upgrade, as the new parts are barely better than the old parts. Why spend the money on upgrade parts or a new system if there's no real benefit? As for the high-end, Intel has been offering us nothing but Xeon scraps for years and ignoring the potentially very lucrative market that could come from better meeting the needs of ultra high end consumers. Imtel has basically told us, "Go away, you don't matter to us" while making the very parts we covet available to OEMs and other entities and refusing to offer them to us. What do we do? Expound the virtues of Intel's products to our friends or family? Hardly. I've encouraged many colleagues and family members not to bother upgrading their two to three year old machines due to lack of need. Personally, I've cancelled plans for very significant purchases of high end hardware in the last couple of years due to fact that I'm not willing to spend big money on processors that are hard locked. My current server? Kept running LONG after I'd have otherwise replaced it. My new server? Being cobbled together with leftover parts from 2012. I'd have much rather spent $10k on processors in 2014 and another $10k in processors last month to upgrade my server. I'd have easily spent those amounts again building a monster duallie workstation for myself.

Sorry, much of the decline of the PC market can be squarely laid on Intel's shoulders. Pissing off those people who make you money in a certain market segment is a sure fire way to see to the decline of that segment.
 
lutjens said:
Sorry, much of the decline of the PC market can be squarely laid on Intel's shoulders. Pissing off those people who make you money in a certain market segment is a sure fire way to see to the decline of that segment.
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But even if Intel had ramped the delivery of faster and faster parts, where's the need? Where are the applications and software that would use all of this power? I'm not saying you have no point at all I just don't think not delivering faster, power hungry x86 CPUs at a quicker rate is Intel's core issue, pardon the pun.
 
heatlesssun said:
But even if Intel had ramped the delivery of faster and faster parts, where's the need? Where are the applications and software that would use all of this power? I'm not saying you have no point at all I just don't think not delivering faster, power hungry x86 CPUs at a quicker rate is Intel's core issue, pardon the pun.
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It's simply a chicken and egg scenario. Software makers are going to make their applications work well on the hardware that's actually being offered, not the hardware that might be offered in the near or distant future, as doing that costs money. If they see that more powerful processors are actually being offered, they'll code their applications (in most cases) to take advantage of that horsepower. The onus is on Intel to make the power available....build it and they will come. Making that power available encourages better coding and more rapid development of applications that can use it. Take for example 32-bit processors...when they first came out, had no 32-bit applications that could run on them. But 32-bit apps came...and probably wouldn't have come had there been no 32-bit capable processor to run them on. Imagine Intel refusing to build a 32-bit capable processor...the PC market would eventually decline substantially. Today, it's the same sort of scenario...;)
 
lutjens said:
It's simply a chicken and egg scenario. Software makers are going to make their applications work well on the hardware that's actually being offered, not the hardware that might be offered in the near or distant future, as doing that costs money. If they see that more powerful processors are actually being offered, they'll code their applications (in most cases) to take advantage of that horsepower. The onus is on Intel to make the power available....build it and they will come. Making that power available encourages better coding and more rapid development of applications that can use it. Take for example 32-bit processors...when they first came out, had no 32-bit applications that could run on them. But 32-bit apps came...and probably wouldn't have come had there been no 32-bit capable processor to run them on. Imagine Intel refusing to build a 32-bit capable processor...the PC market would eventually decline substantially. Today, it's the same sort of scenario...;)
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But that goes both ways. There's huge capital expense in the CPU fabrication business and accelerating that process has cost. In a world that's been moving to mobile I'm just at a loss as to how spending more money to introduce more CPU power at faster intervals solves the main problems for Intel.
 
Intel has made amazing progress in mobile processors (speed versus watts is mind boggling). They have also made intense gains in integrated graphics. There graphics are not only respectable in performance, but actually preferred if you do not do gaming (65 watts for CPU and GPU is great).

But regardless the money is drying up. And this increases the problem.
 
lutjens said:
It's simply a chicken and egg scenario. Software makers are going to make their applications work well on the hardware that's actually being offered, not the hardware that might be offered in the near or distant future, as doing that costs money. If they see that more powerful processors are actually being offered, they'll code their applications (in most cases) to take advantage of that horsepower. The onus is on Intel to make the power available....build it and they will come. Making that power available encourages better coding and more rapid development of applications that can use it. Take for example 32-bit processors...when they first came out, had no 32-bit applications that could run on them. But 32-bit apps came...and probably wouldn't have come had there been no 32-bit capable processor to run them on. Imagine Intel refusing to build a 32-bit capable processor...the PC market would eventually decline substantially. Today, it's the same sort of scenario...;)
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I see where you're coming from, but I don't think more powerful CPUs would change much about the home consumer market. Ten years ago the average desktop was slow and unresponsive. Twenty years ago it was ridiculously slow and unstable. About the time Sandy Bridge rolled around we hit a point where all of the basic office and productivity stuff runs pretty well. There will always be users that need more horsepower, but the days of your average user upgrading every two years are long gone. We used to have to. Computers were so slow in the 80s and 90s. Remember waiting for them to boot or to open programs? Looking at today, what use is more CPU power for running web browsers and MS office? Think of the percentage of home and office computing that consists of just those two things.

It's kind of like more horsepower in cars. More is good and will drive sales, but only to a point. Do you remember in the 80s when a family sedan had less than 100hp? Sports cars were a different proposition then than they are now. Most people aren't going to buy a sports car these days when the freaking accords and camrys have 275+hp. You just don't need more than that to safely merge onto the highway, just like you don't need Haswell E to run MS word. Of course, more power can be an awful lot of fun...
 
westrock2000 said:
Intel has made amazing progress in mobile processors (speed versus watts is mind boggling). They have also made intense gains in integrated graphics. There graphics are not only respectable in performance, but actually preferred if you do not do gaming (65 watts for CPU and GPU is great).
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Amazing progress, but it might not have been enough. Polaris being 2.5x perf/watt on the same package as Zen could be a massive problem for them. Intel has no graphics even approaching that performance level and CPU performance seems to be increasingly less of a concern.
 
heatlesssun said:
I don't think it's anywhere near this simple. Clearly today's era of personal computing is much different than that which started the PC revolution that I'd say started in the mid 1980s. The x86 PC was the center of the computing universe for two decades and then the world went mobile and like Microsoft, Intel didn't do what it needed to do to adapt to the new market. Faster and faster power hungry non-mobile devices just isn't what drives computing today.
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The thing is there's a relationship between chip speed (instructions per second) and power usage: performance per watt. The same process and technologies that give you a faster chip at whatever maximum wattage you're targeting for desktops also give you a lower TDP chip at whatever minimum speed you're looking for in mobile.
 
Seems like to me they would be doing more hiring to discover new technological ideas to explore in the "Internet of Things" space. Intel should strive to be more like Google; dip their toes into more markets and try to improve upon the existing tech with their expertise. It takes a great eye to see where people need a better solution to a problem, and then a great team to bring that solution to market. I think these firings are to keep the shareholders happy. Or maybe they think that their current talent lacks the imagination necessary to see what direction the company needs to be headed.
 
Singularity_Survivor said:
12,000 people fired, wow.
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Not to nitpick words but most will be laid off. The distinction being the package that is offered. A fired employee typically receives their 2 weeks pay and nothing more. Also, if they are fired for cause, their eligibility for unemployment can be threatened. Intel has previously offered their employees packages when they leave (pay for each year of service, access to insurance, and sometimes resume services). No idea what kind of packages are being offered but employees who have been there for years are likely to receive many months pay to go.
 
heatlesssun said:
But that goes both ways. There's huge capital expense in the CPU fabrication business and accelerating that process has cost. In a world that's been moving to mobile I'm just at a loss as to how spending more money to introduce more CPU power at faster intervals solves the main problems for Intel.
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There's little added expense (other than the production cost of building bigger CPUs). The improvements that Intel has refused to make are primarily in the core count department. The high core count chips are already designed and built, except that Intel chooses to heavily restrict the core count on the consumer side of the equation, instead giving their best chips to the datacenter segment only (which surprise surprise is popular and growing). If there was an 8-core mainstream (Socket 1151) option for discrete graphics users and Extreme Edition chips were say 16-core+ (and fully enabled), software developers would take notice and revise their coding to properly take advantage of such chips. This would be primarily due to how much more common an 8-core would be if the mainstream platform had such an option. As it is now, an 8-core on the desktop is a huge rarity, and not really worth their attention or time to optimize their code for such chips.

Like you say, more power is fun, but having more CPU power available in the form of many more cores would be very attractive to many users who could make use of that power both now and in the future when better threaded applications come out. These users aren't going to have their appetite for more power fully satiated by a wicked CPU, so there is little risk of losing future sales as these users will likely buy its successor too. Having more power available for those who need it not only drives current sales, but future ones as well. It gets people excited about such hardware and that excitement has driven our hobby in the past and has helped to propel the PC industry as a whole as well.
 
lutjens said:
It's simply a chicken and egg scenario. Software makers are going to make their applications work well on the hardware that's actually being offered, not the hardware that might be offered in the near or distant future, as doing that costs money. If they see that more powerful processors are actually being offered, they'll code their applications (in most cases) to take advantage of that horsepower. The onus is on Intel to make the power available....build it and they will come. Making that power available encourages better coding and more rapid development of applications that can use it. Take for example 32-bit processors...when they first came out, had no 32-bit applications that could run on them. But 32-bit apps came...and probably wouldn't have come had there been no 32-bit capable processor to run them on. Imagine Intel refusing to build a 32-bit capable processor...the PC market would eventually decline substantially. Today, it's the same sort of scenario...;)
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One could argue that most processors are already significantly more powerful than the applications and the average user's needs (which is one of the reasons for the stagnation). For games, typically one of the high performers, they are more driven by video performance than CPU performance. Also, since many of the AAA games will release on both console and PC, there is not as much incentive for a game company to build a product that only 30% of their market can play. Business software at the user level has shifted to laptop/mobile usages where battery performance is more important than CPU performance. Given the limited usage that most users have for PCs (internet, Netflix, casual games, tax software, etc) they will continue to support low powered but high battery performance solutions. Business will stick with dumb clients and laptops. Both will migrate their most mobile needs to tablets, phones, and hybrids. Intel will still have more than 100,000 employees after the layoff so they can continue to support the mobile environment and performance gaming PCs and servers while developing competitive solutions for the ultra mobility environment (phones, tablets).
 
Couple this with Toshiba's plan to cut about 8% of its workforce, and the tech industry just lost 20,000 jobs. Expect to see more of this in the coming months. With China's economy contracting, the tech industry will have to respond in kind with its workforce and likely, they will plan their cutbacks to coincide with the summer doldrums. It helps mitigate the migration of short-sighted investors.
 
Now would be a good time for someone to show up on AMD's doorstep with a case full of investment capital. Assuming this is not a move to just replace with a cheap source of labor.
 
spugm1r3 said:
Couple this with Toshiba's plan to cut about 8% of its workforce, and the tech industry just lost 20,000 jobs. Expect to see more of this in the coming months. With China's economy contracting, the tech industry will have to respond in kind with its workforce and likely, they will plan their cutbacks to coincide with the summer doldrums. It helps mitigate the migration of short-sighted investors.
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Toshiba has been posting some multi-billion dollar losses though, so they're in a little bit different situation. They have to make cuts now to stay afloat. Intel continues to make money, they have longer term strategic reasons for these cuts.

All this talk about PCs and IoT though... I wish they'd just focus on making chips. I mean they have to be conscious of those trends, but the focus to me should be on the chip making. And if you look at the size of the divisions and accounting within the company, that still seems to be where their focus is. All this IoT vs PC hype seems like investor/analyst chum.
 
It would be interesting to understand what divisions were being cut. Intel does a lot more than produce processors.
 
drescherjm said:
It would be interesting to understand what divisions were being cut. Intel does a lot more than produce processors.
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There's some numbers from the layoffs in August:
Intel layoffs by the numbers: How many got the ax, what departments, and what ages

IoT was actually the hardest hit group back in August, but they were a relatively small group to begin with. Intel doesn't have a 'PC' business unit. So what does it mean in this new announcement when they say they're shrinking PC and growing IoT? Their biggest units by far are Logic Technology and Fab/Sort Mfg. - the groups that design and manufacture chips - which were not hit particularly hard in August. Maybe the PC/IoT shift means they're going to move some things around inside the chip making side of the business away from big CPUs and towards smaller embedded chips and SoCs? Groups that were hit particularly hard in August include datacenters, servers, IT, software.

I have no idea what the IoT group even does. As far as I can tell their primary concern is producing marketing material with "IoT" all over it. IoT. IoT. IoT. Is this a good time to point out that PCs are things on the internet?
 
As much as I would love to move to IT or something else in the company, staying close to the wafers has been the safest place to be.
 
My Wonderful Ex-wife works for Intel-Chandler. Golly, I hope she's not affected. That would just not be fair! Wait...What's that you say? Kar...What? Oh! Karma, got it!!!
 
Layoffs are sometimes necessary but if Intel is doing this and bringing more HB1 Visa workers their ass needs to be investigated.
 
fdiaz78 said:
Layoffs are sometimes necessary but if Intel is doing this and bringing more HB1 Visa workers their ass needs to be investigated.
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IT workers union? union boss an adaptive algorithm? joking aside a good algorithm could give good insight in boss worker relationships
 
kbrickley said:
One could argue that most processors are already significantly more powerful than the applications and the average user's needs (which is one of the reasons for the stagnation). For games, typically one of the high performers, they are more driven by video performance than CPU performance. Also, since many of the AAA games will release on both console and PC, there is not as much incentive for a game company to build a product that only 30% of their market can play. Business software at the user level has shifted to laptop/mobile usages where battery performance is more important than CPU performance. Given the limited usage that most users have for PCs (internet, Netflix, casual games, tax software, etc) they will continue to support low powered but high battery performance solutions. Business will stick with dumb clients and laptops. Both will migrate their most mobile needs to tablets, phones, and hybrids. Intel will still have more than 100,000 employees after the layoff so they can continue to support the mobile environment and performance gaming PCs and servers while developing competitive solutions for the ultra mobility environment (phones, tablets).
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That's the problem...Intel is only producing products which satisfy CURRENT needs. They're not providing the performance to develop the improvement in applications and other software to enhance tomorrow's performance. Tomorrow's performance will come from increase core counts, Providing more cores now to the mainstream and enthusiast segments spurs development of better coding practices and more multi-threaded applications which will pay off in much better optimized applications and larger performance gains in the future. It encourages software makers to add new features and abilities that require more performance, performance that's presently unavailable to the consumer market.

High end users aren't having their needs served. Not just high end enthusiasts, but many professional users who require maximum performance. There are many people who could take advantage of a high clocked, high TDP, high core count chip, but Intel only provides such chips to certain partners and steadfastly refuses to offer these chips to the channel. This tells me that their intent and desire is to restrict the performance available to the market, when they should be doing the exact opposite to grow future demand.
 
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lutjens said:
That's the problem...Intel is only producing products which satisfy CURRENT needs. They're not providing the performance to develop the improvement wiin applications and other software to enhance tomorrow's performance. Tomorrow's performance will come from increase core counts, Providing more cores now to the mainstream and enthusiast segments spurs development of better coding practices and more multi-threaded applications.
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Intel produces many chips with multi cores (the XEON versions go into the teens). NVidia and AMD both offer hundreds of cores on their video cards. I think these cuts will allow Intel more flexibility to produce extreme level products with higher core counts or with higher speeds. Intel is not abandoning the PC market and they will still have over 100,000 employees, even after the layoffs. These changes seem to be more designed to help Intel compete with the ARM technologies (which Intel doesn't really offer competitive solutions in yet).
 
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