Intel Hit by More Layoffs: Data Center Group Facing Cuts Despite Growth

The cuts come as part of a broader cost-reduction effort that has already eliminated 40,000 positions across the company over the past year. Intel said the reductions aim to optimize operational efficiency and streamline execution, without providing a specific target for the Data Center Group.

The Data Center Group had shown signs of recovery, with revenue rising 5% in the most recent quarter to $4.8 billion, driven by demand for cloud computing and AI infrastructure. However, Intel has been under pressure to improve margins and reduce costs as it invests heavily in new chip manufacturing technology.

Intel emphasized that the layoffs will not alter its long-term product roadmaps for AI and data center chips. The company is betting on its upcoming Granite Rapids and Sierra Forest processors to regain market share from rivals like AMD and Nvidia.

The restructuring follows a series of leadership changes and strategic shifts under CEO Pat Gelsinger, who has been working to turn around the company's fortunes. Intel has also been cutting costs in other divisions, including its PC chip and networking businesses.

Employees affected by the latest round of layoffs will receive severance packages and outplacement support, Intel said. The company did not disclose the exact number of jobs to be cut in the Data Center Group.