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Intel to cut 12,000 staff as PC sales llapse

Intel is cutting 12,000 jobs in the next year as the PC market flounders and it concentrates on the internet of things.

The move, which the company is calling a "restructuring initiative", will see the equivalent of 11 per cent of its global staff made redundant.

The reduction in staff will see global "site consolidations" as well as both voluntary and involuntary redundancies. In an email to staff CEO Brian Krzanich wrote that most of the closures and losses would be detailed to staff during the next 60 days but some would last until 2017.

"These are not changes I take lightly," Krzanich said, before going to explain that the job losses were part of a long-term strategy to alter the business.

Intel, which made its name in the PC business, will now focus on the internet of things and data centres. Krzanich said he wanted to make Intel the "leader for the smart, connected world".

The two areas accounted for 40 per cent of Intel's revenue and most of its operating profit in the last year, Intel said in a statement. Both of the profitable areas "largely offset the decline in the PC market segment".

According to figures from Gartner the first quarter of 2016 saw a nine per cent drop in PC sales compared to the first quarter of the previous year – 64.8 million units were shipped, the analysts said. The quarter was the sixth consecutive one where PC shipments declined and the first time since 2007 when the amount of PCs shipped fell below 65 million units.  

In recent years Intel has changed its business focus as sales of PCs have dropped off. This has included a big push on wearable devices.

In June 2015 the company announced it had purchased smart eyewear makers Recon for an undisclosed fee. Intel has also made strides into the wearables world and collaborated on an Android Wear watch with Tag Heur and Google.

The company also recently unveiled its button-sized Curie module that could power the wearables of the future. The device was built on a tiny Intel chip called Quark SE and also contains Bluetooth, motion sensors and battery charging capabilities.

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