Gelsinger leaves Intel after failed comeback attempts

After more than three years at the helm of once-dominant chipmaker Intel, CEO Pat Gelsinger has announced his departure.

The former CEO leaves the company at a time when competitors like Nvidia are capitalizing on the AI boom and achieving unprecedented growth. Meanwhile, Intel struggles to retain its former dominance and faces issues across several areas, including its finances.

Gelsinger, who has been pursuing the idea of Intel’s comeback, implemented various cost-cutting measures to streamline operations and improve profitability. Last year, he took a 25% pay cut and asked higher-level employees to take 5-15% cuts.

This summer, after Intel reported a $1.6 billion loss in Q2, Gelsinger proposed a $10 billion cost reduction plan, which also included the layoffs of 15% of its employees.

However, the company's board wasn’t satisfied with the results. Reuters, based on information from a source inside Intel, reported that Gelsinger’s “costly and ambitious plan to turn Intel around was not working, and the progress of change was not fast enough.”

This year, Intel also witnessed previously unseen issues with its desktop processor line. The return rates of a major Intel retailer in France show that the company’s stability issues may have affected around 5% of its 13th and 14th-generation desktop CPUs.

In addition, the company faces growing competition from AMD and Qualcomm. This year, Qualcomm announced its Arm-based Snapdragon X laptop processors, outperforming those with Intel’s x86 architecture.

Qualcomm reportedly approached Intel with a takeover offer in September. However, it appears that a deal will not move beyond the offer stage.

Gelsinger first joined Intel in 1979 at Intel and eventually became its first chief technology officer. He later left the company in 2009 and rejoined it 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,” Gelsiner said in a farewell statement.

Now, Intel will be run by two interim CEOs: the company’s chief financial officer, David Zinsner, and Michelle (MJ) Johnston Holthaus, while the board of directors finds a new CEO.

Meanwhile, Frank Yeary, the independent chair of Intel's board, will become interim executive chair during the transition period.

“While we have made significant progress in regaining manufacturing competitiveness and building the capabilities to be a world-class foundry, we know that we have much more work to do at the company and are committed to restoring investor confidence,” Yeary said.