Intel's Pat Gelsinger Retires as CEO Amid Company's Challenges

Intel CEO Pat Gelsinger is leaving his role as the head of the company, a decision coming after well-documented financial struggles that have included layoffs at the chipmaking giant.

Gelsinger has retired effective Dec. 1, according to Intel. He has also stepped down from the board of the directors. The company has appointed David Zinsner and Michelle (MJ) Johnston Holthaus as interim co-CEOs while the board seeks a replacement for Gelsinger, who dedicated nearly 35 years of his career to Intel.

“Leading Intel has been the honor of my lifetime," Gelsinger said. "This group of people is among the best and the brightest in the business, and I’m honored to call each and every one a colleague. Today is, of course, bittersweet as this company has been my life for the bulk of my working career. 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.”

Zinsner previously served as EVP and CFO of Intel, while Holthaus was executive VP and general manager of CCG Technologies. Frank Yeary, independent chair of the board of Intel, will become interim executive chair during the transition period.

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Intel's Frank Yeary

“On behalf of the board, I want to thank Pat for his many years of service and dedication to Intel across a long career in technology leadership," Yeary said. "Pat spent his formative years at Intel, then returned at a critical time for the company in 2021. As a leader, Pat helped launch and revitalize process manufacturing by investing in state-of-the-art semiconductor manufacturing, while working tirelessly to drive innovation throughout the company.”

Yeary continued: “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. As a board, we know first and foremost that we must put our product group at the center of all we do. Our customers demand this from us, and we will deliver for them. With MJ’s permanent elevation to CEO of Intel Products along with her interim co-CEO role of Intel, we are ensuring the product group will have the resources needed to deliver for our customers. Ultimately, returning to process leadership is central to product leadership, and we will remain focused on that mission while driving greater efficiency and improved profitability.”

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Intel's stock price was up 3.5% on the news as of 9:52 a.m. ET on Monday.

Intel's Financial Struggles

The company reported a net loss of $16.6 billion in the third quarter, which it claims is due to impairment and restructuring changes. The company is "making progress" on its profitability, Zinsner told Reuters. But it's been a slow struggle. The company confirmed in August that it intended to lay off 15,000 workers, a decision reflective of its current financial troubles. It also restructured to allow parts of its business to become independent, including its chip foundries. It is also planning to sell its 150-acre campus in Folsom, California. The sale would likely release some of the company's capital but maintain operations and staff.

Intel has had a few positive developments in the last few weeks. For example, it finalized a $7.9 billion CHIPS Act Grant with the Department of Commerce, a decision that will help it expand its manufacturing. This includes the company ensuring that it retains control of the foundries in question.

The company faced the potential of a takeover from Qualcomm, but leadership there stepped back from their interest in Intel, according to Bloomberg. The deal was reportedly too complex and challenging to go forward, according to Qualcomm.

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Intel, the longtime leader in central processing units and semiconductors for computers, has seen rivals AMD and Nvidia significantly eat into its market share, particularly as the artificial intelligence revolution has begun.

Pat Gelsinger's EMC and VMware Years

In 2009, Gelsinger left Intel after 30 years with the company to become president and chief operating officer at EMC, a role he held until 2012. He then became CEO at VMware, a role he held for eight-and-a-half years before returning to lead Intel.

Dell bought EMC, which owned VMware, for $67 billion in 2016, which was the largest merger or acquisition by dollar amount in tech history.