# Intel Cuts Jobs in Data Center and AI Group Despite 22% Revenue Growth > Source: > Published: 2026-07-23 12:24:03.460823+00:00 # Intel Cuts Jobs in Data Center and AI Group Despite 22% Revenue Growth - Intel's Data Center and AI Group is cutting an undisclosed number of jobs as part of CEO Lip-Bu Tan's ongoing restructuring [[1]](https://www.tomshardware.com/tech-industry/policy/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) - The division generated $5.05 billion in Q1 2026 revenue, up 22% year-over-year, making the timing notable [[3]](https://www.trendforce.com/news/2026/07/21/news-intel-reportedly-plans-data-center-and-ai-group-layoffs-despite-the-units-22-1q26-revenue-growth/) - Intel's global workforce has fallen nearly 40% over four years, from ~132,000 in 2022 to ~81,000 today [[2]](https://www.benzinga.com/markets/tech/26/07/60568468/intel-layoffs-data-center-ai-unit-earnings) - The company says product commitments and its strategic roadmap remain unchanged [[3]](https://www.trendforce.com/news/2026/07/21/news-intel-reportedly-plans-data-center-and-ai-group-layoffs-despite-the-units-22-1q26-revenue-growth/) - Intel reports Q2 2026 earnings on July 23, with Wall Street expecting $14.45 billion in revenue [[2]](https://www.benzinga.com/markets/tech/26/07/60568468/intel-layoffs-data-center-ai-unit-earnings) Intel has begun a new round of layoffs targeting its Data Center and AI Group, the division responsible for Xeon server processors, custom AI chips, and data center architecture. The company has not disclosed how many positions will be eliminated, but confirmed the cuts in statements to multiple outlets, describing the move as an effort to become a "more focused and efficient organization" [[1]](https://www.tomshardware.com/tech-industry/policy/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) [2]. The layoffs arrive at a paradoxical moment for the unit. Intel's Data Center and AI Group posted $5.05 billion in revenue during Q1 2026, a 22% increase year-over-year and the division's strongest growth since Intel's broader restructuring began in late 2024 [3]. Intel said the changes will not affect the group's product commitments or strategic roadmap . [[2]](https://www.benzinga.com/markets/tech/26/07/60568468/intel-layoffs-data-center-ai-unit-earnings)The cuts are the latest step in CEO Lip-Bu Tan's turnaround plan, which has already reduced Intel's global workforce by roughly 40% — from approximately 132,000 employees in 2022 to around 81,000 today. More than 5,000 U.S.-based employees were laid off throughout 2025, primarily in California, Oregon, Arizona, and Texas [2]. ## The Cuts Intel informed Data Center and AI Group employees of the layoffs on or around July 21, 2026. A company spokesperson told reporters that Intel is realigning the division to ensure it has "the right roles and skills in place" to position the business for long-term success [[1]](https://www.tomshardware.com/tech-industry/policy/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) [3]. The company committed to supporting affected employees through the transition but did not provide a specific headcount figure. An Intel spokesperson, Nancy Sanchez, previously described similar cuts to the San Francisco Chronicle as eliminating "roles associated with projects that are no longer priorities" [4]. Intel may disclose more detail when it reports second-quarter earnings on July 23, where Wall Street expects adjusted earnings of $0.22 per share on $14.45 billion in revenue, compared to a loss of $0.10 per share on $12.86 billion in the year-ago quarter . [[2]](https://www.benzinga.com/markets/tech/26/07/60568468/intel-layoffs-data-center-ai-unit-earnings)## Division Performance vs. Headcount Pressure The tension between the division's financial trajectory and the layoff decision underscores the nature of Tan's restructuring: it is structural, not purely reactive to weak demand. The Data Center and AI Group's 22% year-over-year growth in Q1 2026 reflects rising enterprise demand for server infrastructure driven by AI training and inference workloads [3]. Yet Intel faces sustained competitive pressure from AMD, whose EPYC server processors have steadily gained enterprise market share over recent years. Nvidia's data center GPU dominance and the emergence of custom silicon from hyperscalers — including Google's TPUs and Amazon's Trainium/Inferentia — have further compressed Intel's addressable market in AI-specific compute [4]. Intel's Xeon roadmap, including next-generation processors built on advanced packaging and manufacturing nodes, remains the company's primary lever for recapturing server share. The company has emphasized that these product timelines are unaffected by the workforce reductions [[2]](https://www.benzinga.com/markets/tech/26/07/60568468/intel-layoffs-data-center-ai-unit-earnings) [3]. ## Broader Restructuring Under Tan Lip-Bu Tan took over as CEO in March 2025 after Pat Gelsinger's departure, inheriting a company that had already announced a 15% global workforce reduction. Under Tan, Intel has continued trimming headcount across multiple business units while simultaneously investing in advanced manufacturing and foundry services [2]. Intel shares have climbed more than 300% over the past year, trading around $104 as of July 22, 2026, reflecting investor confidence in Tan's turnaround strategy despite the ongoing cuts [2]. The stock's performance suggests Wall Street views the restructuring as a net positive for margins and long-term competitiveness. ## Implications for Data Center Operators For data center operators and server OEMs, the layoffs raise questions about Intel's medium-term execution capacity in its server CPU and AI chip business, even as the company insists its roadmap is intact. Intel remains the dominant supplier of server CPUs globally, and any disruption to its product cadence would ripple through the data center supply chain. The cuts also reflect a broader industry pattern: semiconductor companies are simultaneously riding record data center demand while aggressively restructuring to improve operating margins. AMD, Nvidia, and Broadcom have all undergone workforce adjustments in recent years even as their data center revenues surged. For procurement teams at hyperscalers and colocation operators, the key metric to watch will be whether Intel's next-generation Xeon and AI accelerator launches stay on schedule through 2026 and 2027. ## Companies mentioned ## Further sources [[1] Tom's Hardware — Intel layoffs to hit Data Center group ↗](https://www.tomshardware.com/tech-industry/policy/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) [[2] Benzinga — Intel Launches Fresh Layoffs in Data Center and AI Unit Ahead of Ear… ↗](https://www.benzinga.com/markets/tech/26/07/60568468/intel-layoffs-data-center-ai-unit-earnings) [[3] TrendForce — Intel Reportedly Plans Data Center and AI Group Layoffs Despite th… ↗](https://www.trendforce.com/news/2026/07/21/news-intel-reportedly-plans-data-center-and-ai-group-layoffs-despite-the-units-22-1q26-revenue-growth/) [[4] Notebookcheck — Intel lets go of Data Center employees citing changed priorities ↗](https://www.notebookcheck.net/As-AMD-increases-server-market-share-Intel-lets-go-of-129-Data-Center-employees-citing-changed-priorities.454181.0.html) The stories that matter, in one email. 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