- Intel to slash over 20% of employees in data centre and edge divisions as part of restructuring
- Cost-cutting move aligns with CEO Pat Gelsinger’s renewed focus on AI and chip manufacturing
What happened: Semiconductor giant aims to streamline operations amid financial pressure and shifting priorities
Intel is set to reduce more than 20% of its workforce in key business units, including the data centre and network and edge divisions, according to a report by The Information and cited by The News International. The layoffs are expected to affect thousands of employees globally, beginning in May. This marks one of the largest workforce reductions under CEO Pat Gelsinger’s leadership. The job cuts follow Gelsinger’s earlier pledge to cut $10 billion in costs by 2025 and focus on transforming Intel into a leading semiconductor foundry.
The impacted divisions include the Data Centre and AI Group (DCAI) and the Network and Edge Group (NEX), both of which were merged into a new division earlier this year, now headed by Intel veteran Alexis Bjorlin. Intel did not comment publicly on the exact number of jobs to be eliminated but confirmed ongoing organisational changes aimed at improving efficiency and business focus.
Also read: Intel offloads Altera to Silver Lake in $8.75B deal
Also read: Intel and TSMC set to form joint venture
Why it is important
This sweeping restructuring reflects Intel’s struggle to keep up with rivals in a fast-changing chip industry, particularly in the AI and cloud computing sectors. Competitors like Nvidia and AMD have surged ahead in AI-driven hardware, while Intel has faced delays in chip development and production. The layoffs signal a strategic shift away from legacy business units towards more profitable, forward-looking technologies.
Intel’s renewed emphasis on its foundry ambitions is part of a larger effort to regain technological leadership and supply chain independence, especially as global tensions spotlight semiconductor security. Gelsinger’s cost-cutting and reinvestment plan is high-risk but necessary, given that Intel’s revenue fell 20% in 2023. The affected divisions, DCAI and NEX, were once seen as growth engines. Downsizing them raises questions about Intel’s execution strategy and its ability to balance innovation with profitability. While painful, the restructuring may be critical to Intel’s long-term survival in a market increasingly dominated by AI and hyperscale data.
