Chipmaker Intel Corp. plans to cut its workforce by 11% amid slower PC sales and a missed earnings forecast. About 12,000 employees would be affected by the decision.
Company CEO Brian Krzainich stated that PC sales, which accounts for half of Intel’s revenues, had slowed down, leading to the company missing analyst’s estimates for its 1Q16 results.
The company wants to shift focus onto higher-margin products such as chips for data centres and internet-connected devices.
In the first quarter, net income rose 2.7% to $2.05bn, or 42 cents a share, while sales climbed 7.2% to $13.7bn. On average, analysts had projected earnings of 37 cents and revenue of $13.8 billion.
Revenues for the second-quarter was estimated by Intel to be about $13.5bn. Average analyst estimate revenues of $14.2bn, according to Bloomberg. Intel’s gross margin for 2Q16, is forecasted at about 61%.