Intel cuts jobs in data center division despite revenue growth

Semiconductor giant Intel is implementing further layoffs within its Data Center Group, one of its most profitable divisions. This unit is responsible for Xeon server processors and infrastructure for AI. Management explained the decision as an optimization of personnel necessary for long-term business development. This is reported by Ixbt.com reports .

In an official statement to The Oregonian, Intel representatives confirmed that the organizational changes are in line with the company's overall strategy. While the company did not disclose how many employees would be laid off, it emphasized that the process would not negatively impact customer commitments or product roadmaps.

Revenue up, but competition is fierce

Interestingly, these cuts are occurring at a time when financial performance in the data center segment has improved. According to last quarter's results, the division generated $5 billion in revenue, a 22% increase compared to the same period last year. The primary driver for this growth is the rising demand for Xeon processors used in AI systems.

However, despite positive financial results, Intel has yet to introduce AI accelerators capable of competing with NVIDIA GPUs. This is causing the company to lose market share in one of the most promising segments. According to iXBT.com, this factor has forced the company to reconsider its expenses.

Global restructuring strategy

These layoffs are part of a large-scale transformation that Intel expects to complete by March 2025. The company plans to reduce its total headcount to approximately 75,000 by the end of the year. This strategy aims to cut costs and simplify the company's structure, with Lip-Bu Tan being one of those responsible for its execution.

In the future, Intel intends to focus on the following priorities:

• Expanding production based on the Intel 18A process node;
• Developing the contract semiconductor manufacturing (foundry) business;
• Increasing sales of Xeon processors for AI infrastructure.

Intel products also hold a leading position among server solutions in the Uzbekistan market. Xeon processors are widely used in local data centers and government IT projects. Therefore, the company's global structural changes and new product lines may also impact regional technological upgrades in the future.