Intel is cutting jobs inside the data center business Wall Street is counting on, and that makes Thursday's earnings call more than a numbers exercise.
There's a particular kind of confidence required to cut staff from your strongest business two days before you report to Wall Street. Lip-Bu Tan is showing it. Intel confirmed layoffs in its Data Center and AI Group on Tuesday, July 21, with second-quarter results due after the market closes on Thursday, July 23. The stock rose anyway. Investors, as usual, can be very calm about other people's jobs.
The exact number of positions being eliminated hasn't been disclosed. That's the first thing to watch. According to CRN, an Intel spokesperson said the cuts are part of a broader strategy to become a more focused and efficient company, and said the company is trying to make sure the group has the right roles and skills for long-term success. The company also told CRN the layoffs aren't expected to affect product commitments or road maps.
That's the official line. It isn't enough.
The Data Center and AI Group is the piece of Intel you don't casually damage. Intel's own Q1 2026 earnings release showed Data Center and AI revenue of $5.1 billion, up 22% from a year earlier. That is real growth, even if AMD is moving faster. AMD reported Q1 data center revenue of $5.8 billion, up 57% year-over-year, driven by EPYC processors and Instinct GPU shipments.
If you're Tan, the issue isn't whether the unit is growing. It is. The issue is whether Intel can grow without carrying the old Intel cost structure behind it. Pat Gelsinger left in late 2024, and Tan became CEO in March 2025 with a mandate to simplify a company that had spent heavily across foundry, CPUs, GPUs, software and manufacturing all at once. More than 5,000 U.S. employees were marked for cuts in 2025 across California, Oregon, Arizona, and Texas, according to CTech's review of WARN filings. This is not a small trim around the edges.
Extending the cuts into Data Center and AI says Tan isn't protecting the fastest grower from restructuring pain. He is applying the same margin logic everywhere. You may not like that. But you should understand it.
The growth is real, but so is the pressure
Frankly, Intel doesn't get to pretend it is chasing Nvidia on equal terms in AI accelerators. Nvidia owns that market. The more realistic question is whether Intel can defend a profitable role in server CPUs, AI inference, advanced packaging, and custom foundry work while AMD keeps taking data center share and TSMC keeps setting the manufacturing pace.
Tan's own language on Intel's Q1 call points there. Intel's release quoted him saying the next wave of AI will bring intelligence closer to the end user, moving from foundation models to inference and agentic computing, a shift he said would increase the need for Intel CPUs, wafers, advanced packaging, and foundry capacity. That is the story Intel wants you to buy. It is narrower than the old ambition, and probably healthier for it.
The foundry piece is still the harder test. Intel Foundry posted $5.4 billion in Q1 revenue, up 16% from a year earlier, according to Intel's earnings release. In June, Intel said 18A-P had entered risk production, and last week Tom's Hardware reported that select Panther Lake layers on Intel 18A were dual-qualified for ASML's existing 0.33 NA and newer 0.55 NA High NA EUV scanners. Those details sound technical because they are. They are also the turnaround.
Intel's earnings guidance is clear enough. The company forecast Q2 revenue of $13.8 billion to $14.8 billion, non-GAAP gross margin of 39%, GAAP EPS of $0.08, and non-GAAP EPS of $0.20. Investopedia noted Wall Street consensus around $14.44 billion in revenue and $0.22 in adjusted earnings per share before the report. Those figures matter. They won't settle the argument.
Thursday needs a straight answer
The earnings call needs to answer something simpler than the spreadsheet. How deep are the Data Center and AI cuts, and where do they land? Cutting duplicated management roles is one thing. Cutting the engineers and architects who are meant to carry Intel's AI infrastructure case is something else entirely.
CRN reported that Intel's stock rose about 8% from Monday's close to Tuesday afternoon after the layoff news, while Investopedia said the shares were up more than 160% for the year despite a sharp pullback from recent highs. That is a lot of confidence resting on a company still proving it can execute.
Intel declined to give the scope of the latest layoffs. That silence can hold for a news cycle, not for an earnings call. Tan doesn't need to persuade you that Intel can be everything it once tried to be. He needs to show that a smaller, more disciplined Intel can still protect the businesses that matter most.
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