Computer chip giant Intel has announced layoffs to 12,000 employees, as part of a restructuring process intended to address the rise of IoT, and the continuing slump in PC popularity.
The move comes a week after Gartner reported that first quarter PC shipments were down 9.6 percent, and follows news of a 22 percent drop in sales of computing hardware at IBM.
Intel CEO Brian Krzanich announced the cuts as part of a $1.2 billion corporate restructuring, alongside confirming lower-than-expected first-quarter earnings and reducing projected revenue for the year.
Currently, 60 percent of Intel’s revenue is from chips supplied to PCs. But with the increasing popularity of mobile devices, the company has been left to face the financial consequences of underestimating how quickly the shift away from desktop computing would happen.
The reliance on revenue from chips to computer manufacturers means that PCs remain key to Intel’s short term plans. However, Intel faces a major problem in that department, too. Swathes of the tech industry rely on the company consistently delivering chips that offer more for the same money. But the process of ongoing refinement and improvement, referred to as Moore’s Law, appears to be gradually slowing down. New chips have generally been produced in two-year cycles, but the next generation is expected to take longer.
In light of the uncertainty surrounding the shift from personal computers to pocket-sized devices, Brian Krzanich has admitted that “It’s time to make this transition and push the company all the way over”, with renewed focus expected on supplying chips for smartphones, cloud computing, sensors and other IoT devices.
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A positive move for IoT
Whatever the motivations behind Intel’s repositioning, it’s undoubtedly a positive move for the burgeoning Internet of Things (IoT). Speaking to BostInno Ryan Lester, director of IoT strategy at LogMeIn, stated that Intel brings a variety of strengths “that will help move the IoT industry forward.” As well as providing security for hardware and software in both smart devices and the cloud that connects those devices, “They can take a similar role as they did in the early PC days by driving standards and connectivity. Similar to what they did with USB and Wi-Fi, I would love to see them drive hardware standards on how devices interoperate with each other and transmit data”, Lester said.
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