US chip giant Intel says it will trim its workforce by 5 per cent this year as it shifts from personal computers to powering mobile gadgets.
Word of the job cuts came on Friday, a day after Intel reported its net profit last year sank 13 per cent but that the troubled personal computer market appeared to be stabilising.
Intel ended the year with 107,600 workers. It reported on last week that it made a net profit of $US9.6 billion ($10.9 billion) on revenue of $US52.7 billion last year as compared with $US11 billion in net profit on $US53.3 billion in revenue in 2012.
''We had a solid fourth quarter with signs of stabilisation in the PC segment and financial growth from a year ago,'' Intel chief executive Brian Krzanich said.
At the Consumer Electronics Show gadget extravaganza in Las Vegas this month, Intel unveiled a major new push into wearables and connecting everyday devices as it seeks to leapfrog the competition in mobile computing.
Mr Krzanich said Intel would produce on its own or with partners a range of products - from a health monitor integrated into baby clothes to a heart monitor in earbuds.
He showed the company's new ''personal assistant'', dubbed Jarvis, which is Intel's answer to the voice-activated Google Now and Apple's Siri.
Intel will be producing a smartwatch with ''geofencing'', which allows families to receive alerts if children or elderly parents leave a specific geographic area.
The new devices unveiled at the electronics show will be available this year, Mr Krzanich said, without offering details on pricing or specific partners for the products.
But some analysts said Intel's profitability may be hurt by the move.
''The problem with mobile and wearables is the more you win, the more you lose,'' said Rob Enderle of Enderle Group in Silicon Valley.
''Intel is a large-margin company, and wearables are a small-margin product.''