Intel to Cut Jobs in Data Center and AI Group: What the Chipmaker Said

Intel has announced plans to slash jobs in its data center group, a move that is part of a broader trend sweeping through the tech industry. The company’s goal of becoming “a more focused and efficient” organization has led it to restructure areas that were once considered core to its business.

The job cuts are just the latest step in Intel’s efforts to reduce its workforce. Over the past four years, the company’s global employee count has dwindled by 40%, from nearly 132,000 employees in 2022 to around 81,000 today. This reduction is a result of cost-cutting measures and a shift towards more strategic investments.

The data center group, which focuses on server CPUs, custom AI chips, and data center architecture, has been one of Intel’s most profitable divisions in recent years. Revenue from this segment increased 22% year over year to $5.05 billion during the first quarter of 2026. Despite its financial performance, however, the division is being restructured as part of Intel’s broader strategy.

One possible interpretation of this move is that Intel is preparing for a future where its core business – chipmaking – becomes even more critical. As cloud computing and AI continue to grow in importance, data centers are becoming increasingly vital infrastructure hubs. By streamlining its operations in this area, Intel may be positioning itself to take advantage of emerging trends.

However, some analysts have expressed concerns that these cuts will ultimately hinder Intel’s ability to innovate and develop new technologies quickly enough. The company’s CEO, Pat Gelsinger (not Lip-Bu Tan), has signaled a desire to reduce layers of management and improve decision-making speed, but this may not necessarily translate into faster innovation.

Intel’s recent deal with Apple to design and build chips in the US is also worth noting. While some have hailed this agreement as a sign of the company’s resurgence, others have raised concerns about its implications for global supply chains and competition.

The chipmaker’s stock has surged 464% in the past 12 months, driven by analyst expectations of strong quarterly results and a bright outlook. However, this rally may be masking deeper structural issues within the industry.

As Intel prepares to announce its second-quarter earnings later this week, investors will be closely watching for signs that the company’s restructuring efforts are paying off. The broader question remains: what does this trend of job cuts and industry consolidation portend for the future of tech?