Intel CEO Pat Gelsinger forced to retire after 40 years at the company, as chipmaker continues to struggle

Pat Gelsinger, the long-serving CEO of Intel, has retired, marking the end of a four-decade-long career that shaped both the company and the tech world.  

According to Bloomberg, Intel’s board lost confidence in CEO Pat Gelsinger’s leadership following a recent meeting that scrutinised the company’s performance and strategic plans. Because of the meeting, Gelisnger was presented with two choices — either to resign or be removed. Gelsinger opted to step down.

Gelsinger’s journey with Intel started in 1979 when he joined as a young engineer, quickly making his mark and eventually becoming the company’s first Chief Technology Officer.  

After a stint away, he returned as CEO in 2021 to guide Intel through a transformative era. However, his departure comes at a challenging time for the chipmaking giant, as it struggles to keep pace with fierce competitors like NVIDIA and AMD.

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Gelsinger has also stepped down from his role on Intel’s board of directors, leaving a leadership gap that will be temporarily filled by interim co-CEOs David Zinsner and Michelle Johnston Holthaus. The search for a permanent successor has already begun, as the company looks to stabilise its position and regain lost ground in the semiconductor market.

Funding woes compound Intel’s challenges

Among its many woers Intel is facing a cut in federal funding for its semiconductor manufacturing projects. Earlier this year, the Biden administration had announced up to $8.5 billion in direct funding for Intel, along with $11 billion in loans, as part of a broader effort to bolster the US semiconductor industry.  

However, recent adjustments have reduced Intel’s share of this funding, partly due to the company’s separate $3 billion contract to supply chips to the military.

While these funding changes are unrelated to Intel’s financial struggles, they come during a difficult period. In August, the company announced it would lay off 15 per cent of its workforce — approximately 15,000 employees — in an effort to cut costs and streamline its operations. Unlike many competitors, Intel manufactures its own chips in addition to designing them, a model that has proven costly as the semiconductor landscape grows increasingly competitive.

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Interim leadership may bring fresh perspectives

With Gelsinger’s departure, Intel’s interim co-CEOs bring a mix of financial and operational expertise to steer the company through its current challenges. David Zinsner, who has been serving as Chief Financial Officer, has been instrumental in managing Intel’s fiscal strategies during a turbulent time. Meanwhile, Michelle Johnston Holthaus oversees several key business divisions under her role as CEO of Intel Products, including client computing, data centres, and AI.

Frank Yeary, the independent chair of Intel’s board, will also take on a more active role as interim executive chair. Yeary acknowledged Gelsinger’s significant contributions, noting how his leadership helped revitalise Intel’s semiconductor manufacturing and drive innovation across the company. Despite the challenges Intel faces, Yeary expressed confidence in the company’s ability to navigate its next phase.

Gelsinger’s Legacy: An engineer’s CTO

Pat Gelsinger’s career at Intel is nothing short of legendary. Joining the company as an 18-year-old engineer, he played a pivotal role in some of the tech industry’s most transformative developments.  

He was instrumental in the creation of foundational technologies such as USB and WiFi, which revolutionised connectivity.  

As Senior Vice President and General Manager of Intel’s Digital Enterprise Group, Gelsinger also oversaw 14 microprocessor programs, including the design of the original 80486 processor, and laid the groundwork for Intel’s Core and Xeon processor families.

Beyond his technical contributions, Gelsinger is recognised for his leadership and vision. Under his guidance, Intel made significant strides in advanced semiconductor manufacturing, investing heavily in state-of-the-art processes to keep up with global demand.

His commitment to innovation earned him a place in the National Academy of Engineering in 2023, solidifying his status as a leader in the tech world.

With Gelsinger, gone for now, Intel now faces two challenges — one, that of finding a new CEO, a captain who ca turn the ship around, and two, to do something about its lagging performance in the competitive semiconductor market.