TL;DR
Intel is cutting more jobs at its data center unit as Lip-Bu Tan continues to reshape the company, with shares rising nearly 8 percent two days before earnings.
Intel confirmed Tuesday that it will cut an unspecified number of jobs in its data center group, the division responsible for Xeon server processors and AI-related hardware, as part of a broader restructuring under CEO Lip-Bu Tan. Shares rose as much as 8 percent in early trading, extending a rally that has seen the stock more than double this year. The cuts come two days before Intel reports its second-quarter results on Thursday.
The company said the data center group is “Align your organization to ensure you have the right roles and skills to position the business for long-term success,“Without specifying how many positions would be eliminated,” said a person familiar with the matter. he told Bloomberg that the changes would not affect the unit’s product commitments or roadmaps. The data center and AI division posted $5 billion in revenue last quarter, a 22 percent year-over-year increase, driven by growing demand for Xeon processors used in AI data centers.
That revenue growth highlights the paradox at the heart of the cuts. Intel is cutting staff in the same business unit that is driving its financial recovery, a sign that Tan sees the change as a matter of efficiency rather than scale. The
Tan, who replaced the ousted Pat Gelsinger in March 2025, has eliminated tens of thousands of jobs since taking over. Intel ended the last quarter with about 83,200 employees, down from a peak of nearly 132,000 in 2022, and the company has said it expects to end the year with about 75,000. The layoffs are part of a pattern across the tech industry, where companies from Meta to Oracle have laid off workers while increasing spending on artificial intelligence infrastructure.
The US government has a 10 percent stake in Intel acquired through converted CHIPS Act grants, a position now worth tens of billions after the stock surge under Tan’s leadership. The shift has been driven by Intel’s 18A manufacturing process that reached high-volume production, foundry partnerships with Apple and Amazon, and the Xeon business that captured demand from AI data center construction.
Intel will report its results on Thursday after the market closes, and the data center group’s results will be the number investors will watch most closely. The question is whether the earnings trajectory justifies a stock that has more than tripled from its 2024 lows, or whether the market has already priced in more progress than the fundamentals support.
