The longtime Intel employee had a tough mission to restore the company to its past glory, but he oversaw major layoffs and revenue decline.
Intel’s embattled CEO resigned this week, kicking off a replacement search at a critical time for the chipmaker, one of the state’s largest private employers.
Intel said in a press release Monday that Pat Gelsinger had announced his retirement the previous day.
Citing anonymous sources, Bloomberg reported the company’s board met with Gelsinger last week and told him they would fire him if he didn’t step down. Board members are reportedly frustrated with the slow progress of Gelsinger’s turnaround strategy.
The company’s 11-member board of directors formed a search committee to find a new CEO and named senior leaders David Zinsner and Michelle Johnston “MJ” Holthaus to serve as co-CEOs until a replacement is selected. Zinsner is Intel’s CFO; Holthaus oversees the company’s PC business.
An Intel spokesperson declined to say whether Zinsner or Holthaus are in the running for the top spot, or answer other questions.
“We are not commenting further than what was in our press release regarding Pat’s retirement and the search for his replacement,” Intel’s Sarah Keller wrote to Oregon Business.
In Intel’s release, board chair Frank Yeary thanked Gelsinger for his years of service and said the company still had far to go to restore investor confidence.
“With Dave and MJ’s leadership, we will continue to act with urgency on our priorities: simplifying and strengthening our product portfolio and advancing our manufacturing and foundry capabilities while optimizing our operating expenses and capital. We are working to create a leaner, simpler, more agile Intel,” Yeary said.
Gelsinger, 63, spent the first 30 years of his career at Intel, The Oregonian reported. He joined the company at 18 and as a protegé of former Intel CEO Andy Grove, Gelsinger rose to become the company’s first chief technological officer. He left for a decade to run his own company but returned to Intel in 2021 as CEO with a goal of restoring the company to manufacturing and technological dominance. In his time as CEO, Gelsinger is credited with delivering more advanced computer chips. But he oversaw a steep dive in revenue as competitors ate into Intel’s market share. A plan by Gelsinger to move into contract manufacturing also failed to attract customers.
Under Gelsinger, Intel’s stock lost more than half its value. Gelsinger’s turnaround plan involved separating its chip design business from its manufacturing, to make those operations more competitive in their respective markets, according to The O.
“Today is, of course, bittersweet as this company has been my life for the bulk of my working career,” Gelsinger writes in an Intel statement. “I can look back with pride at all that we have accomplished together. 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. I am forever grateful for the many colleagues around the world who I have worked with as part of the Intel family.”
Though Intel was in a bad position when Gelsinger returned in 2021, it’s arguably in a worse position now. The next CEO will likely face tough decisions of whether to sell some of Intel’s factories or spin them off into a separate company. The company recorded $17 billion in losses last quarter and eliminated 15% of its workforce, or 16,500 employees including 1,500 in Oregon. Much of Intel’s misfortune has to do with missing out on the ongoing AI boom in tech, and losing ground in custom chipmaking to Taiwan Semiconductor Manufacturing Co.
Among Gelsinger’s last acts, he finalized plans for $7.9 billion in subsidies from the 2022 CHIPs Act. He remained committed to building and modernizing factories in Oregon, Arizona and Ohio.
“As part of Intel’s cost reduction plan, certain business units made some business and function-specific workforce reductions,” an Intel spokesperson wrote of hiring efforts amid major layoffs. “However, we continue to invest in areas core to our business to ensure we are well-positioned for long-term growth.”
Intel’s stock climbed 6% on Monday after Gelsinger’s departure was announced.
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