Earlier this week Intel announced a major restructuring that will result in the loss of 12,000 jobs over the next several weeks, an amount equal to approximately 11% of the company's workforce. I've been sitting on the news for a while, trying to decide what I could add to the hundreds of reports on it and honestly, I haven't come to any definitive conclusion. But here it goes.
It's obviously worth noting the humanitarian part of this announcement – 12,000 people will be losing their job. I feel for them and wish them luck finding employment quickly. It sucks to see anyone lose their job, and maybe more so with a company that is still so profitable and innovative.
The reasons for the restructuring are obviously complex, but the major concern is the shift in focus towards IoT (Internet of Things) and cloud infrastructure as the primary growth drivers.
The data center and Internet of Things (IoT) businesses are Intel’s primary growth engines, with memory and field programmable gate arrays (FPGAs) accelerating these opportunities – fueling a virtuous cycle of growth for the company. These growth businesses delivered $2.2 billion in revenue growth last year, and made up 40 percent of revenue and the majority of operating profit, which largely offset the decline in the PC market segment.
That last line is the one that might be the most concerning for enthusiasts and builders that read PC Perspective. The decline of the PC market has been a constant hum in the back of minds for the better part of 10 years. Everyone from graphics card vendors to motherboard manufacturers and any other product that depends on the consumer PC to be relevant, has been worried about what will happen as the PC continues in a southward spiral.
But it's important to point out that Intel has done this before, has taken the stance that the consumer PC is bad business. Remember the netbook craze and the rise of the Atom product line? When computers were "fast enough" for people to open up a browser and get to their email? At that point Intel had clearly pushed the enthusiast and high performance computing market to back burner. This also occurred when management pushed Intel into the mobile space, competing directly with the likes of Qualcomm in a market that it didn't quite have the product portfolio to do so.
Then something happened – PC gaming proved to be a growth segment after all. Intel started to realize that high end components mattered and they made attempts to recapture the market's mind share (as it never lost the market share). That is where the unlocked processors in notebooks and "anniversary edition" CPUs were born, in the labs of Intel where gamers and enthusiasts mattered. Hell the entire creation of the Devil's Canyon platform was predicated on the idea that the enthusiast community mattered.
I thought we were moving in the right direction. But it appears we have another setback. Intel is going to downplay the value and importance of the market that literally defines and decides what every other consumer buys. Enthusiasts are the trend setters, the educators and the influencers. When families and friends and co-workers ask for suggestions for new phones, tablets and notebooks, they ask us.
Maybe Intel is just in another cycle, another loop about the fate of the PC and what it means. Did tablets and the iPad kill off the notebook? Did mobile games on your iPhone keep users from flocking to PC games? Have the PS4 or Xbox One destroyed the market for PC-based gaming and VR? No.
The potential worry now is that one of these times, as Intel feigns disinterest in the PC, it may stick.