The cuts are set to be part of the transition from being a “PC company to one that powers the cloud and billions of smart, connected computing devices”. This change comes as the PC business continues of soften and 40% of company revenue have come from the data center and Internet of Things segments. Compared to Q1 2015, Q1 2016 was slightly worse, with a 1.2% drop in gross margins though revenue was up 7%.
Platform sales volume (processors and chipsets) fell 15% but revenue was up 19% due to the higher selling prices. We can all see that with how much Skylake cost compared to Haswell. overall, the costs of restructuring will come to $1.2 billion, but Intel expects to save $750 million in 2017 and $1.4 billion every year after that. It will be interesting to see where most of the cuts land and if they will impact the fabs and R&D budgets.