Intel Plans New Layoffs in Its Fastest-Growing Server Chip Division
Intel, the American chip giant, is preparing another round of layoffs, focusing on its fastest-growing division despite recent strong performance. According to reports from Oregon media, the upcoming cuts will target Intel's server chip division, which surprised investors last quarter with a 22% year-over-year revenue increase, driven by high demand for core processors in AI server farms. This division recently surpassed $5 billion in quarterly revenue and is expected to continue growing rapidly, with second-quarter results due to be released soon.
The exact number of layoffs has not been disclosed but is estimated to involve hundreds of employees. The impact on Intel's Israeli workforce is expected to be limited, affecting only a few dozen workers, as this division employs very few people in Israel. Intel currently has 63 open positions, suggesting the layoffs may primarily affect management layers, similar to previous rounds led by CEO Pat Gelsinger. Since 2024, Intel has cut about 40,000 jobs globally, including a reduction of approximately 4,000 employees in Israel from a peak of 12,000.
Intel's stock has fallen 30% from its June peak amid a cooling chip market but remains one of the best-performing U.S. tech stocks in 2026 with a 163% gain year-to-date. This contrasts with Nvidia's 9% and AMD's 135% increases in the same period. Wall Street analysts mostly maintain a neutral "hold" rating on Intel, with an average price target of $106, slightly above the current price. Bank of America issued a bullish $150 target in June, citing optimistic forecasts for Intel's core processors and growing demand from companies like Apple, Google, and Nvidia.
Investor sentiment is mixed, with hedge funds and investment firms showing divergent positions. Intel is benefiting from stable production of its new A18 processor, marking progress in manufacturing sub-2-nanometer chips, and from increased sales of server core processors used in AI workloads that do not require the most advanced chips.
Intel stated that the organizational changes in its Data Center Group (DCG) aim to make the company more focused and efficient without altering product roadmaps or priorities. The company emphasized DCG's central role in cloud infrastructure, AI, and enterprise computing.
