Intel layoffs target Data Center and AI Group despite strong revenue growth and AI boom

Intel layoffs to hit Data Center group -- division focused on server CPUs, AI chips, and data center architecture to be hit by an unknown number of cuts

Intel just announced another round of layoffs more than a year after CEO Lip-Bu Tan warned of "tough decisions" required to get the company back on track. This decision has resulted in the reduction of its headcount by more than 35,000 since 2024, when ex-CEO Pat Gelsinger revealed that its data center and foundry divisions have lost $1.6 billion. The latest announcement came months after the last job cuts and is still happening despite the company posting a strong first quarter this year. According to Oregon Live, its share price has more than tripled from a low of $23 per share to more than $96 today, with the data center group reporting sales of $5.1 billion for the first quarter. However, this good performance seems not to have affected the firm's plan to streamline its operations. "As part of our broader strategy to become a more focused and efficient company, (the data center group) is aligning its organization to ensure it has the right roles and skills in place to position the business for long-term success," Intel told the publication in a statement. It also added, "We are committed to treating all impacted employees with respect and providing resources to support them through this transition." Unfortunately, the company did not say how many positions will be cut and when it is happening -- it only assured that the reduction-in-force won't affect its business commitments and plans to launch new products. While the AI infrastructure build-out was initially powered by GPUs and memory chips, advancements in agentic AI have greatly increased the demand for CPUs, putting Intel in a good position with its Xeon chips. Aside from that, the company is reporting customer interest, possibly including Apple, for its 18A and 14A nodes. It's also planning to launch an AI GPU in the latter half of 2026 that will compete against Nvidia's RTX Pro 5000 GPU. This is a slow reversal of its misfortunes in the first half of the decade, but it seems that it's not happening fast enough for its data center group employees who will be affected by the job cuts. It's quite surprising that Intel plans to gut its Data Center group, which is one of its strongest performers and is in a good position to take advantage of the ongoing AI data center boom. But despite the high demand for AI data centers, it seems that the company still needs to cut its personnel count to streamline its operation. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.

Intel Launches Fresh Layoffs in Data Center and AI Unit Ahead of Earnings as Lip-Bu Tan Pushes Turnaround

Intel Targets Data Center and AI Workforce The company has not disclosed how many employees will be impacted by the latest job cuts. Intel said the move is part of its broader effort to streamline operations and position the business for long-term growth, rather than a shift in its product strategy, Seeking Alpha reported on Monday. An Intel spokesperson reportedly said that the company is becoming more "focused and efficient" by aligning the organization with the "right roles" and skills needed for future success. The spokesperson added that Intel remains committed to supporting affected employees through the transition. Intel did not immediately respond to Benzinga's request for comments. The Data Center and AI Group oversees Intel's server processors, custom AI chips and data center technologies, making it one of the company's most strategically important businesses. Layoffs Come Despite Strong AI Business Growth The latest workforce reduction comes even though Intel's data center business has been gaining momentum. During the first quarter of 2026, the division generated $5.05 billion in revenue, up 22% from a year earlier. The layoffs are the latest step in Tan's turnaround plan after he succeeded Pat Gelsinger as CEO in March 2025. As part of that strategy, Intel announced plans to reduce its global workforce by about 15%. More than 5,000 U.S.-based employees have already been laid off, with most reductions occurring in California, Oregon, Arizona and Texas throughout 2025. Investors Await Intel Earnings The restructuring has coincided with a sharp rally in Intel shares, which have climbed more than 317% over the past year as investors have backed Tan's efforts to revive the company. Intel is scheduled to report second-quarter earnings after the market closes on July 23. Wall Street expects adjusted earnings of 22 cents per share on revenue of $14.45 billion, compared with a loss of 10 cents per share on revenue of $12.86 billion during the same quarter last year. The latest cuts also come as tech layoffs remain elevated across the industry. According to Layoffs.fyi, the sector has eliminated 121,326 jobs so far in 2026, nearly matching the 122,606 layoffs recorded during all of 2025. Price Action: Intel shares closed Monday up 2.13% at $97.06 and rose another 0.60% to $97.64 in after-hours trading, according to Benzinga Pro. According to Benzinga Edge Rankings, Intel ranks in the 98th percentile for Momentum, reflecting a strong medium- and long-term price trend despite recent short-term weakness. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.