Intel is cutting 12,000 jobs globally, or 11 percent of its workforce, as the company moves away from its traditional business of selling chips used in personal computers.
The restructure will allow Intel to focus on "high-growth areas", such as the internet of things and the data centre. Growth businesses delivered Intel with US$2.2 billion in revenue growth last year, and made up 40 percent of revenue and the majority of operating profit.
The job cuts, which should complete in mid-2017, will be done through worldwide site consolidations, voluntary and involuntary departures, and "a re-evaluation of programs".
"The majority of these actions will be communicated to affected employees over the next 60 days with some actions spanning in to 2017," according to the company.
The chipmaker is expecting to changes to deliver US$750 million in savings this year and annual run rate savings of US$1.4 billion by mid-2017.
Intel said it would record a pretax restructuring charge of US$1.2 billion in the second quarter.
The company also said on Tuesday that CFO Stacy Smith will move to a new role leading sales, manufacturing and operations. Intel said it would begin a formal search process for a successor.
The announcement came amid Intel's first-quarter results, with net revenue rising to US$13.70 billion from US$12.78 billion.
Intel's shares were down 2.5 percent in extended trading.
Reporting by Narottam Medhora in Bengaluru; Editing by Sriraj Kalluvila
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