Intel (INTC) said Tuesday it plans to lay off 12,000 employees, about 11 percent of its workforce, by the middle of next year in a move to slash costs and edge away from the flagging PC business.

The chipmaker said the restructuring plan will drive growth by heightening its focus on cloud computing and Web-connected technology, also known as the "Internet of Things." Those areas accounted for 40 percent of Intel's revenue last year and most of its profit, while its PC market business shrank.

"Our results over the last year demonstrate a strategy that is working and a solid foundation for growth," said Intel CEO Brian Krzanich in an email to employees. "The opportunity now is to accelerate this momentum and build on our strengths."

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The company, based in Santa Clara, California, is a leading supplier of computer chips, but PC sales have been declining steadily in recent years. It's trying to focus on its most profitable lines of business, which include making processors for data center computers and Internet-connected gadgets.

Intel said the initiative will save $750 million this year and $1.7 billion by mid-2017. It will take a one-time charge of $1.2 billion in the second quarter.

The chipmaker said the cuts will include "voluntary and involuntary departures" from its operations around the world. Most of the affected workers will be notified in the next 60 days.