On the eve of earnings reports, layoffs were revealed, and Intel (INTC.US) took the most popular data center division to “reduce costs and increase efficiency”

The Zhitong Finance App learned that chip giant Intel (INTC.US) has once again launched a new round of cost optimization actions. On Monday, Intel officially informed employees in its data center business unit that the company is planning a new round of layoffs in the department. This is another time that Intel has used a “big layoff” after experiencing large-scale downsizing in 2024 and 2025.

In response to this layoff, Intel issued an official statement saying, “As part of our broader strategy to become a more focused and efficient company, [the data center division] is adjusting its organizational structure to ensure that it has the right roles and skills to lay the foundation for the long-term success of the business.”

The company said it expects the restructuring to make operations simpler and faster, and emphasized that the layoffs will not affect its product commitment or established development roadmap. The statement also promised to respect all affected employees and provide them with the resources they need during the transition period.

What is slightly paradoxical is that the “manipulated” data center and artificial intelligence (AI) division are the main engines of Intel's recent performance recovery. According to financial data, in the first quarter of 2026, the division's revenue reached about US$5.05 billion, a sharp increase of 22% over the previous year.

Intel is scheduled to release its second-quarter earnings report after the US stock market this Thursday (July 23). The market's current expectations are quite optimistic. Analysts generally expect Intel's adjusted earnings per share to reach 0.22 US dollars, with revenue of 14.45 billion US dollars. Compared with the bleak situation of loss of 0.10 US dollars per share and revenue of 12.86 billion US dollars in the same period last year, it will be a sharp reversal.

“Slimming down” by nearly 40% in four years, major streamlining of management hierarchy

This layoff is a continuation of Intel's long-term “slimming plan.” The current CEO Chen Liwu proposed a 15% global layoff plan after succeeding Pat Gelsinger (Pat Gelsinger) as head of the seal in March 2025. Up to now, more than 5,000 employees have been laid off in the US alone, mainly in California, Oregon, Arizona, and Texas. Most of these layoffs were completed in 2025.

Looking at the longer term, Intel's global workforce has drastically shrunk from nearly 132,000 in 2022 to about 81,000 today, a drop of nearly 40% in four years. This includes both direct layoffs and personnel losses due to the divestment of part of the business.

Chen Liwu previously made it clear that Intel needs to reduce management levels so that the company can make decisions more quickly and speed up the pace of research and development of new technologies.

Despite constant news of layoffs, Wall Street is buying Intel's reform path quite a bit. Over the past year, Intel's stock price has soared from about 23 US dollars, with a cumulative increase of more than 300%. Although the current stock price is lower than the peak of 142 US dollars that it briefly broke through last month, it is still at an absolute high level. Investors are generally betting that AI systems will generate huge demand for Intel microprocessors, and expect Apple (AAPL.US) and other large technology companies to outsource chip manufacturing orders to Intel in the future. According to reports, Intel has now won 18A and 14A design orders from leading companies such as AMD (AMD.US), Nvidia (NVDA.US), Microsoft (MSFT.US), Micron (MU.US), OpenAI, and Meta (META.US).

However, behind the capital carnival, the pain of regional industries cannot be ignored. As home to Intel's largest manufacturing base, Oregon was particularly affected. The number of local Intel employees has dropped from about 23,000 in 2024 to about 16,000 today. This directly caused the number of semiconductor workers in the state to fall to a 30-year low. A new report commissioned by the Oregon Economic Development Authority even warns that Oregon's position in the global semiconductor industry could become “insignificant” if the state government does not focus on nurturing emerging companies and establishing strong talent delivery channels.

Expanding the focus to the entire industry, the wave of “cost reduction and efficiency” in the technology industry is far from over. According to layoffs.fyi, a layoff tracking agency, since entering 2026, the technology industry has laid off a total of 121,326 workers, and this number is infinitely close to 122,606 for the whole of 2025. Obviously, while embracing a new era of AI, everything from giants to startups continues to experience the pain of structural remodeling.