Intel ousts CEO Pat Gelsinger as chipmaker struggles with recovery
Intel has announced the departure of CEO Pat Gelsinger after nearly four years in the role. The decision follows significant declines in Intel's stock price and market share, along with concerns over his inability to counter NVIDIA's dominance. The announcement came after a tense board meeting where his turnaround strategies were questioned. Gelsinger was given the choice to retire or face removal; he opted to step down.
Interim leadership and market response
After Gelsinger's exit, Intel has named its CFO David Zinsner and products CEO MJ Holthaus as interim co-CEOs. Veteran board member Frank Yeary will take over as interim executive chair. Following the shakeup, Intel's shares fell by 2% on Monday afternoon. "We are working to create a leaner, simpler, more agile Intel," Yeary said.
Gelsinger's career and future challenges for Intel
Gelsinger, 63, had a stellar career at Intel, becoming the company's first chief technical officer at the turn of the century. He later took on a senior role at EMC before rejoining Intel from VMware in 2021 as CEO. "It has been a challenging year for all of us as we have made tough but necessary decisions to position Intel for the current market dynamics," Gelsinger said in a press release.
Gelsinger's ambitious plans and financial impact on Intel
Upon his return in 2021, Gelsinger had ambitious plans to turn Intel into a chipmaking powerhouse. His strategy included massive expansions in the US and globally, which strained Intel's free cash flow and increased its debt. Despite securing government funding through the US CHIPS and Science Act, these aggressive spending strategies were viewed skeptically by investors.
Intel's market struggles and workforce reduction
Intel's inability to keep pace with the AI boom has worked in NVIDIA's favor. The company's market cap is now less than half of its 2021 value, having briefly fallen below $100 billion earlier this year. In August, Intel reported disappointing quarterly results and announced plans to lay off over 15% of its workforce as part of a $10 billion cost-cutting plan.
