Shift away from PC processors causes Intel to lay off 12,000 employees

Numerous reports have chronicled the decline in PC sales for some time now. For example, according to Gartner, the PC market dipped a full 9.6% in Q1 2016 compared to the prior year. Clearly, that makes life difficult for companies that rely on the sale of PCs and their related components. One such company is Intel, and according to Reuters the company is cutting 12,000 positions worldwide as it shifts away from a focus on PC chipsets.

The labor cuts coincide with reduce revenue forecasts, with Intel now predicting mid-single-digit-growth instead of earlier forecasts of mid- to high-single-digit-growth. All in all, the chipmaker is reducing its reliance on the processors that drive Windows and OS X PCs for its future business.

The Santa Clara, California-based company has been focusing on its higher-margin data center 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.

As we noted in our report on the Gartner data, Microsoft’s goal of achieving a billion Windows 10 users is significantly influenced by the drop in new PC sales. Going forward, the company will need to continue to focus on convincing existing Windows users to upgrade rather than relying on a growing PC market to drive new Windows 10 licenses.

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Do you think the PC market will ever stabilize?