Intel is preparing another round of layoffs, this time in the one part of the business that has been growing fastest.
The company has told staff in its Data Center and AI Group, which builds server processors, custom AI chips and data centre architectures, that fresh job cuts are coming.
The move follows major reductions across the company in 2024 and 2025, and Intel may disclose the number of affected roles when it reports second-quarter earnings on Thursday.
What makes the cuts striking is the unit's recent performance.
The division generated $5.05 billion of revenue in the first quarter of 2026, up 22% on a year earlier, buoyed by demand for the chips underpinning AI infrastructure.
Intel has said its product commitments and roadmap remain unchanged, framing the layoffs as a realignment to make the group leaner rather than a retreat from the market.
The decision fits a wider restructuring that has reshaped the company since Lip-Bu Tan took over as chief executive in March 2025, succeeding Pat Gelsinger.
Total headcount has fallen roughly 40% over four years, from about 132,000 employees in 2022 to around 81,000 today, through a combination of business disposals and tens of thousands of layoffs.
More than 5,000 US-based staff have already gone under Tan's plan to reduce the global workforce by about 15%.
The signal for investors is that Tan is not finished reorganising Intel's structure, even as execution improves and underlying demand conditions strengthen.
Cutting into a division riding the AI data centre boom suggests the drive for a simpler, faster organisation is taking priority over near-term expansion.
There are genuine reasons for optimism about that business.
The shift toward agentic AI has lifted demand for the server processors where Intel's Xeon line competes, and the company is reporting customer interest in its most advanced manufacturing nodes.
Intel shares have climbed more than 300% over the past year as investors have backed the turnaround.
That the market has cheered a sharp rally while the workforce keeps shrinking underlines the logic Tan is pursuing: a smaller, more focused Intel is, for now, what investors want to see.
