Yesterday Intel announced their quarterly earnings and that they would be restructuring their business moving forward. That restructuring includes a layoff of up to 12,000 workers, which is nearly 11% of Intel's workforce. Though Intel's earnings for the quarter beat expectations, PC sales continue to decline at significant rates which is threatening a core source of Intel's revenue and profits.
PC sales have come under pressure from tablets and mobile devices, and because it has been quite a long time since each new generation of processor would enable a significantly better experience for the PC user. Arguably, not since the late '90s or perhaps early 2000's has that been the case.
Intel has reinvented itself once before. Turning from a manufacturer of memory chips, which it was primarily until the early '80s, into today's maker of processors. That reinvention also required significant layoffs and was a painful period for the company, though it laid the foundation for some spectacular successes.
Only time will tell if this new reinvention will allow Intel to position itself successfully in Cloud Computing, Mobile, and the Internet of Things. But, we already know that Intel's leadership and board are willing to take a clear-eyed look at their business and do the things they think are necessary for the company to succeed in the face of changing technology trends. Is your organization's leadership and board willing to shake things up if needed? As Hemingway wrote in The Sun Also Rises, bankruptcy happens in two ways: gradually, then suddenly. If your organization is in the gradually phase, as Intel's leadership seems to believe it is, or may be, it is all to easy to let things slide quarter after quarter. But once things start to happen suddenly, it is too late.