Intel Rallies After Saying It’ll Make More Headcount Reductions

The Intel headquarters in Santa Clara, California.

Intel Corp. rallied in early trading Tuesday after confirming it’ll cut more jobs to reduce costs and shake up its key data center unit.

Shares rose as much as 7.9% after the company said it’ll cut an unspecified number of positions at its data center group, or DCG. That extended a rally that’s seen its stock more than double this year on signs that it’s making progress in a turnaround under Chief Executive Officer Lip-Bu Tan.

“As part of our broader strategy to become a more focused and efficient company, DCG is aligning its organization to ensure it has the right roles and skills in place to position the business for long-term success,” the company said in a statement.

That business unit is currently helping a rebound in overall revenue as the Santa Clara, California-based chipmaker rushes to meet demand for processors used in AI data centers. Its Xeon range of products is playing a growing role in running artificial intelligence software as companies ramp up the services they offer.

That’s helping mask the fact that Intel still hasn’t fielded the type of accelerator chip that dominated the process of creating AI software. Intel’s failure to address that market has cost it billions in lost revenue that’s gone to rival Nvidia Corp.

Intel has let go tens of thousands of employees over the last few years, cutting costs as it tried to return to profitability. At the end of last quarter on March 28, the company had about 83,200 staff. That’s down from a peak of over 130,000 workers in 2022.