Intel is preparing another round of layoffs, this time in its data center group, the division responsible for server CPUs, AI chips and data center architecture. The cuts matter because they land in one of the few parts of Intel tied directly to the AI infrastructure boom, where demand for compute hardware has been running hot.
Intel confirmed the move in a statement to Oregon Live. The company did not say how many jobs it will eliminate or when the reductions will take effect. Intel said the data center group is being reorganized as part of a wider effort to make the company more focused and efficient, and that it wants the unit to have the right roles and skills for long-term performance.
Intel also told Oregon Live that affected employees would receive support and that the reduction in force would not change its business commitments or product launch plans. That last part is doing a lot of work. The data center group sits at the center of Intel’s attempt to remain relevant in servers as Nvidia dominates AI accelerators and hyperscalers keep buying whatever silicon can keep their models fed.
The cuts follow a long retrenchment at Intel. Tom’s Hardware has reported that the company has reduced its workforce by more than 35,000 employees since 2024. The latest move comes more than a year after CEO Lip-Bu Tan warned employees that Intel would face “tough decisions” as it tried to repair the business.
The company’s recent numbers make the timing less tidy than a standard bad-quarter layoff story. Oregon Live reported that Intel’s share price has risen from a low of $23 to more than $96, and that the data center group posted $5.1 billion in first-quarter sales. Tom’s Hardware also reported that Intel delivered a strong first quarter this year, with improving forecasts and faster-than-expected yield progress on new manufacturing nodes.
Intel’s problems are older than the latest quarter. Tom’s Hardware previously reported that former CEO Pat Gelsinger disclosed a $1.6 billion loss tied to Intel’s data center and foundry divisions. Tan’s current restructuring appears to continue that cleanup, even in a unit that is generating meaningful revenue.
Why the data center group is sensitive
AI infrastructure was first defined by GPUs and high-bandwidth memory, but CPUs still matter. They coordinate workloads, feed accelerators, run databases and handle the general-purpose work that does not fit neatly onto a GPU. Tom’s Hardware has reported that agentic AI workloads have increased demand for data center CPUs, a trend that could benefit Intel’s Xeon business.
Intel is also trying to prove that its manufacturing roadmap still deserves customer trust. Tom’s Hardware has reported customer interest in Intel’s 18A and 14A process nodes, and noted that Apple has been discussed as a possible customer. Intel is also planning an AI GPU in the second half of 2026, according to Tom’s Hardware, positioning it against Nvidia’s RTX Pro 5000 GPU.
That makes the layoffs awkward, if not contradictory. Intel is cutting inside a business it needs for servers, AI systems and credibility with data center customers. The company says product plans and customer commitments remain intact. Employees in the data center group will find out what “focused and efficient” means in practice.
This story draws on original reporting from Tom's Hardware.
