Intel plans to cut thousands of jobs to finance a recovery and cope with eroding market share, Bloomberg News reported on Tuesday. Shares of the chipmaker were up about 1% in extended trading, although the stock has slumped 40% so far this year. Intel declined to comment on the report when contacted by Reuters.

The U.S. chipmaker remains a major player in the personal computer and server markets, but has struggled to keep pace with the growing demand for chips used in AI applications. CEO Pat Gelsinger has initiated a turnaround to regain the company’s competitive edge, focusing on revitalizing its manufacturing capabilities, investing in advanced chip technologies, and expanding into new markets.

In October 2022, Intel announced a cost-reduction plan that included “people actions”, aimed at slashing annual costs by $3 billion in 2023, reducing the chipmaker’s headcount to 124,800 at the end of 2023 from 131,900 a year earlier, according to regulatory filings. The plan was expected to provide annual cost savings between $8 billion and $10 billion by 2025, the company had said in February last year.

Analysts expect the company’s second-quarter revenue to be about the same as a year earlier, with the data center and AI segment set to post a 23% decline, according to LSEG data. Intel, traditionally known for designing and manufacturing its own chips, has been making a concerted effort to expand into the foundry business, manufacturing chips for other companies.

Investors expect a push to promote chip manufacturing in North America by the Biden administration to diversify supply chains and reduce reliance on Taiwan to boost Intel’s prospects.