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What We Know So Far About The Intel Job Cuts

<p>This file photo shows the Intel sign at Intel headquarters in Santa Clara, California. Intel announced Tuesday that it plans to cut 12,000 jobs worldwide by next year.</p>

Paul Sakuma

This file photo shows the Intel sign at Intel headquarters in Santa Clara, California. Intel announced Tuesday that it plans to cut 12,000 jobs worldwide by next year.

Update: According to a letter released by Intel Monday, April 25, 2016, the company is laying off 784 workers in Oregon.

Oregon’s largest private employer, Intel, announced plans to shed 12,000 jobs worldwide by next year. Chief Executive Officer Brian Krzanich announced the cuts Tuesday.

The company is staying quiet on which parts of its business will be affected the most, but we do know some key details about the changes as of now.

Intel, one of the world’s largest suppliers of semiconductors for decades, is shifting its focus from primarily making chips for personal computers to the growing parts of its business, including cloud-based and connected computing sectors. For years, the sales of personal computers have slowed worldwide as smartphones, tablets and connected devices (think smart thermostats, Rokus, etc.) have taken off in sales. This has led to a decrease in profits in that portion of Intel’s business.

Krzanich announced the cuts as part of the company’s plans to restructure and focus more on its growing sectors. It’s unclear yet which jobs will actually be cut, but Krzanich did say the 12,000 affected employees will be notified within the next 60 days.

According to the Associated Press, the cuts are expected to save the company about $1.4 billion annually by the time they are completed next year.

The Santa Clara, California-based company has restructured several times since 2005, but this is by far the biggest move it has made. According to Bloomberg, shipments of personal computers fell in early 2016 to their lowest levels in a decade. A bulk of Intel’s current business is tied up in producing chips for personal computers. Coupled with steady growth in data centers and the "Internet of Things", Intel has decided to make a substantial shift in its focus, according to Krzanich.

“Together, these businesses delivered $2.2 billion in revenue growth last year, made up 40 percent of our revenue, and the majority of our operating profit,” he said Tuesday.

These changes are being made in an attempt to allow Intel to increase investments in its profitable sectors, and accelerate growth after years of slowdowns that have frustrated Wall street investors.

The company reported $13.7 billion in sales last quarter and profits of $2 billion, both increases from last year.

Intel, based in Santa Clara, California, has more than 19,000 employees in the Beaver state. According to a letter released Monday, April 25, 2016, Intel is laying off 784 employees in Oregon.

Intel has operations at six campuses in Washington County — its largest worksite globally. The primary focus of these campuses is on semiconductor research and manufacturing, according to the company.

Intel has had operations in Oregon since 1974, according to the company. It is also currently the state’s largest private employer. The company is unlikely to cut many jobs from its cloud and smart connected computing divisions. It produces chips for those in Oregon.

Copyright 2016 Oregon Public Broadcasting

Bryan M. Vance