Pat Gelsinger has stepped down as Intel’s CEO, ending his tenure after less than four years. His resignation, accompanied by his departure from the company’s board, reflects the growing pressures Intel faces from financial troubles and increasing competition in the semiconductor industry.
In the interim, two senior executives—David Zinsner and Michelle Johnston Holthaus—will take over as co-CEOs while Intel searches for a permanent leader. This unexpected transition occurs as Intel struggles to regain its footing in a rapidly evolving market.
Financial Losses Highlight Growing Struggles
Intel’s financial performance has suffered significantly, with the company reporting a $16.6 billion (€15.7 billion) loss in its most recent quarter. To address these issues, Gelsinger announced plans in August to cut approximately 15% of Intel’s workforce—around 15,000 jobs. The layoffs are part of a broader cost-saving strategy aimed at reducing expenses by $10 billion (€9.5 billion) by 2025.
In a further blow, the Biden administration recently decided to reduce Intel’s $8.5 billion (€8 billion) federal funding for chip manufacturing plants. This adjustment coincides with Intel receiving $3 billion (€2.87 billion) for supplying military-grade chips. Sources clarified that these changes are unrelated to Intel’s financial performance or operational milestones.
Declining Market Dominance
Once an industry leader, Intel has lost significant ground to rivals, particularly Nvidia. Nvidia’s dominance in chips powering artificial intelligence applications has solidified its position as a market leader. Earlier this month, Nvidia replaced Intel on the Dow Jones Industrial Average, highlighting its growing influence in the semiconductor industry.
Gelsinger’s return to Intel in 2021 was seen as a strategic move to rejuvenate the company he first joined in 1979. As Intel’s first chief technology officer, Gelsinger contributed to its early successes. However, his efforts to restore the company’s prominence faced challenges from heightened competition and structural inefficiencies.
Leadership Transition Amidst Uncertainty
During this transitional phase, Intel’s board chair, Frank Yeary, will serve as interim executive chair. Yeary commended Gelsinger’s efforts, stating, “Pat helped launch and revitalize process manufacturing while driving innovation across the company.”
The two interim co-CEOs bring extensive experience. Zinsner, executive vice president and chief financial officer, will focus on financial stability. Holthaus, CEO of Intel Products, oversees the client computing, data center, AI, and network groups—critical areas for the company’s growth.
Intel’s Path Forward
Following the announcement of Gelsinger’s resignation, Intel’s stock saw a slight rise, gaining 2.6% in morning trading. However, the company’s shares have dropped 42% over the past year, reflecting deep investor concerns.
Gelsinger’s departure signals a turning point for Intel. The company must now address its financial woes, restructure its operations, and develop a strategy to compete effectively against aggressive rivals like Nvidia. The selection of a new CEO will play a pivotal role in shaping Intel’s future as it seeks to reclaim its position as a leader in the semiconductor industry.
