According to Bloomberg News on Tuesday, Intel plans to eliminate thousands of jobs to finance its recovery and manage its shrinking market share, citing sources familiar with the situation.

Shares of the chipmaker, which is scheduled to release its quarterly results on Thursday, saw a 1% increase in after-hours trading, though the stock has fallen 40% this year. Intel declined to comment on the report when approached by Reuters.

While Intel remains a key player in the personal computer and server markets, it has faced challenges keeping up with the rising demand for chips used in AI applications.

CEO Pat Gelsinger has launched a turnaround strategy to restore Intel's competitive edge, emphasizing the enhancement of its manufacturing capabilities, investment in cutting-edge chip technologies, and entry into new markets.

In October 2022, Intel revealed a cost-reduction plan that included "people actions" designed to cut annual expenses by $3 billion in 2023. This plan aims to reduce the company's workforce to 124,800 by the end of 2023, down from 131,900 the previous year, according to regulatory filings.

The plan was anticipated to deliver annual cost savings of between $8 billion and $10 billion by 2025, as the company stated in February of the previous year.

Analysts predict that Intel's revenue for the second quarter will be roughly on par with the previous year, though the data center and AI segments are expected to see a 23% decline, according to LSEG data.

Intel, traditionally recognized for designing and manufacturing its own chips, has been actively working to enter the foundry business by producing chips for other companies. Investors anticipate that the Biden administration's efforts to promote chip manufacturing in North America—aimed at diversifying supply chains and reducing reliance on Taiwan—will enhance Intel's prospects.