TL;DRIntel is cutting more jobs in its data center unit as Lip-Bu Tan continues reshaping the company, with the stock up nearly 8 percent two days before earnings.
Intel confirmed on Tuesday that it will cut an unspecified number of jobs in its data center group, the division responsible for Xeon server processors and AI-related hardware, as part of a broader restructuring under CEO Lip-Bu Tan. Shares rose as much as 8 percent in early trading, extending a rally that has seen the stock more than double this year. The cuts come two days before Intel reports second-quarter earnings on Thursday.
The company said the data center group is “aligning its organization to ensure it has the right roles and skills in place to position the business for long-term success,” without specifying how many positions would be eliminated. A person familiar with the matter told Bloomberg that the changes would not affect the unit’s product commitments or roadmaps. The data center and AI division posted $5 billion in revenue last quarter, up 22 percent year over year, driven by rising demand for Xeon processors used in AI data centres.
That revenue growth highlights the paradox at the centre of the cuts. Intel is trimming headcount in the same business unit that is powering its financial recovery, a sign that Tan views the turnaround as a question of efficiency rather than scale. The Xeon line has found a growing role as the host processor in AI systems, including Nvidia’s own Vera Rubin platform, but Intel still has not produced a competitive AI accelerator chip to rival Nvidia’s GPUs, a failure that has cost it billions in lost revenue.
