Intel announces CEO Gelsinger retiring; replaced with co-CEOs (update)

Intel (NASDAQ:INTC) made the surprising announcement on Monday that Chief Executive Officer Pat Gelsinger is retiring and will be replaced by co-CEOs David Zinsner and Michelle Johnston Holthaus.

Gelsinger is also stepping down from the company’s board of directors. Both departures are effective December 1.

Holthaus has been appointed to the newly created position of CEO of Intel Products, while Frank Yeary was named interim executive chair.

“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 in a statement. “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.”

“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,” Yeary continued. “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.”

Shares rose 4% in premarket trading on the back of the announcement.

Zinsner joined Intel in 2022 from Micron (MU), where he was executive vice president and CFO. He has also worked in leadership roles at other companies, including being president and chief operating officer at Affirmed Networks and senior vice president of finance and CFO at Analog Devices (ADI).

Holthaus was previously executive vice president and general manager of Intel’s Client Computing Group and has had a number of other leadership roles at the company, including chief revenue officer and general manager of the Sales and Marketing Group, and lead of global CCG sales.

Santa Clara, Calif.-based Intel has come under intense scrutiny in recent memory as the company struggles to keep up with competitors AMD (AMD) and Nvidia (NVDA) in the artificial intelligence space and has had several hiccups with its nascent foundry business, designed to compete with Taiwan Semiconductor (TSM).

Intel announced in August that it was letting go 15% of its staff and cut its spending and headcount by $10B as it works to streamline its operations.

Separately in August, Lip-Bu Tan left Intel’s board of directors, with speculation that he departed amid concerns about the company’s plan to turn itself around.

In the most recently reported quarter, Intel said it lost $0.46 per share as revenue fell 6.2% year-over-year to come in at $13.28B. Included in that was an 8% decline in foundry revenue to $4.4B.

However, the company said it made “significant progress” on its $10B cost reduction plan, as it took a $2.8B restructuring charge during the period.

At the time, Gelsinger said he intended to keep the company together, amid speculation that the company would spin off its foundry unit.

Last week, the Biden administration finalized a $7.86B award to Intel from the CHIPs Act to boost U.S.-based manufacturing, down from a previously announced $8.5B.

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