Intel CEO Pat Gelsinger Steps Down After Challenging Tenure Amid Struggles to Regain Market Leadership
Intel announced the retirement of CEO Pat Gelsinger after a tumultuous leadership period. Following aggressive efforts to rejuvenate the company, Gelsinger stepped down, and interim co-CEOs were appointed. Intel faces challenges with investor lawsuits and the uncertainty of its costly expansion plans.
Intel (INTC) announced on Monday that Pat Gelsinger has retired as CEO, effective December 1, and stepped down from the company's board of directors. Gelsinger, who led the company for more than three years, was at the helm of aggressive efforts to revitalize the struggling chip giant.
Following the announcement, Intel's stock saw a brief 5% increase but later reversed course, falling as much as 2.5% in afternoon trading. Wall Street analysts issued cautious views, maintaining their Hold ratings on the stock. By the end of the day, shares had closed down by 0.5%.
Sources close to the matter revealed that Intel's board had lost confidence in Gelsinger, with a leadership change deemed necessary before 2025. The decision, made by a small group of Intel executives, came as a surprise to the wider leadership team, who were only informed of it Sunday afternoon.
The future of Gelsinger's costly expansion efforts, particularly Intel's push to manufacture chips for external clients, remains uncertain. Intel has appointed CFO David Zinsner and former client computing head Michelle Johnston Holthaus as interim co-CEOs. Holthaus has also been named Intel Products CEO. The company emphasized that a search committee has been formed to find a permanent successor to Gelsinger.
Frank Yeary, Intel's board chair, stated, “While we have made significant progress in regaining manufacturing competitiveness and building the capabilities to be a world-class foundry, we know that much work remains and are committed to restoring investor confidence.”
Intel is also facing two lawsuits filed by investors, alleging they were misled about the company's financial performance. One lawsuit, filed by a pension fund in August, came after Intel's announcement of plans to cut 15,000 jobs.
Gelsinger, who had worked at Intel for 30 years before leaving in 2009, returned in 2021 to take over as CEO from Bob Swan. He had promised to restore Intel's leadership, invoking the "Grovian" mindset, inspired by former CEO Andy Grove. Grove had led the company through a turnaround in the 1980s when Intel lost its dominance in memory chips to Japan, pivoting to become the leading producer of CPUs, a strategy that solidified Intel's position in the market.