The sudden departure of Pat Gelsinger, CEO of Intel, has left more than one partner perplexed. Behind the scenes, many are pointing at an unusual approach from Intel and wondering whether the company’s strategy is going up in flames. What is intriguing is the sudden decision, announced in the media as being Gelsinger’s initiative. He has declared his right to early retirement. According to sources, this unexpected decision was prompted by a loss of confidence from the Board of Directors. There are even whispers that he was given the choice of leaving or being abruptly dismissed. It doesn’t take a seasoned analyst to see that the timing and manner of the announcement confirm that the CEO’s departure was not voluntary. Clearly, most observers believe that Gelsinger has been sacrificed as a scapegoat because the company-wide strategy is not moving as quickly as Wall Street would like.
Intel: “Don’t throw the baby out with the bathwater”
Under his leadership, Intel invested heavily in expanding its manufacturing capacity. Colossal investments, ambitious plans, but mixed results. The partners, for their part, are wondering. Erik Stromquist, President of CTL, expresses his concern: “Pat was the strategy”
The appointment of Michelle Johnston Holthaus, a sales and channel veteran, as co-CEO offers a semblance of stability. But doubts persist. Partners want Intel to return to its fundamentals: Core processors for PCs, Xeon processors for servers and the nascent Gaudi range for AI. An option that seems to be supported internally. Frank Yeary, a long-standing Intel board member who is now acting executive chairman, has said that the chipmaker must “put our product group at the centre of everything we do”.
Intel’s troubles are nothing new. Fierce competition from Nvidia and AMD has eroded its dominant position. Revenues have plummeted, market share has eroded and investors have lost patience. But Gelsinger was not to blame for these woes. In fact, his return was intended to ‘turn the tables’. The brutality of his departure obscures the scale of the transformation he initiated to stop the haemorrhaging.
The truth is that Gelsinger’s turnaround plan, while promising, did not bear fruit quickly enough. Plans to build new plants, particularly in Germany, were put on hold. More and more jobs were lost. A situation that led the Board of Directors to take drastic measures.
The question now is what strategy Intel will adopt. The company seems to have appointed a transition team, and an experienced CEO is expected to arrive. It is to be hoped that the wait is short and that the strategy is quickly clarified. Otherwise, speculation will multiply… A situation that is not conducive to confidence in financial circles.