Intel Corp., the world’s biggest maker of semiconductors, said it will cut 12,000 jobs, or 11 percent of the workforce, retrenching as the personal-computer market heads toward a fifth year of decline.
The company said it’s shifting its focus to higher-growth areas, such as chips for data center machines and connected devices. Intel also gave a second-quarter sales forecast that fell short of analysts’ estimates. Revenue will be about $13.5 billion, the company said Tuesday in a statement. That compares with an average analyst estimate of $14.2 billion, according to data compiled by Bloomberg.
Shipments of PCs, a market that provides Intel with almost 60 percent of its sales, fell to their lowest level in a decade in the first three months of 2016. Intel, which had staved off the worst of the impact of the extended slide in laptop demand by stealing market share from an ailing rival and dominating in server chips, is now finding that isn’t enough. Chief Executive Officer Brian Krzanich is bringing in new executives and watching veteran Intel leaders leave as he tries to revitalize the company’s push into the mobile-chip market and jump-start PC demand.
“The PC market has challenges,” said Kim Forrest, a senior equity analyst at Fort Pitt Capital Group, which owns Intel stock. “We were believers at some point that mobile devices would have to be like mini PCs to get real work done. Until then you want to see that their other businesses are holding up to fund their new stuff.”
Adding to recent reshuffles among Intel’s leadership, Chief Financial Officer Stacy Smith will move to a new role as head of manufacturing and sales, the company said in the statement.
Intel shares, which have lagged behind other chip stocks this year, fell less than 1 percent to $31.60 at the close of trading in New York. They were halted ahead of the earnings report.