The massive shake-up announced by Intel reflects the rapid changes in the tech sector and aims to position the Silicon Valley titan for a post-PC world. The chip-making giant on Tuesday said it was cutting up to 11 percent of its global workforce, or some 12,000 positions, to adapt to a slumping market for personal computers and rapid growth in emerging technologies.
Intel said the move aims to "accelerate evolution from a PC company to one that powers the cloud and billions of smart, connected computing devices."
The move represents a new direction for one of the pillars of Silicon Valley, which for years dominated the PC sector as a key partner with Microsoft.
But both firms are now scrambling to adapt to a new reality "where refrigerators and cars and your whole house and highways and traffic lights are talking to the Internet," said Roger Kay, analyst at Endpoint Technologies Associates.
Intel "got fat, dumb and happy like everyone else in the PC industry," Kay said, before recognising the shift to mobile and the "Internet of Things."
Yet Kay said Intel's move is a gamble because "their processors have to go into things that may not be invented."
"Your strength is your weakness and your weakness is your strength - when you're making money on PCs, it's hard to go into a new area you don't know," Kay added.
Patrick Moorhead, analyst at Moor Insights & Strategy noted that Intel's moves "are very reflective of what's happening overall in the technology space - the PC-Internet model gave way to the smartphone-app model which is shifting to the IoT-cloud model."
"Intel recognises they need to move more quickly," Moorhead said.
Intel's cuts were announced after surveys showed the deep slump for the personal computer market.
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