The CEO of Intel, Bob Swan, is stepping down on 15 February in news that sent shares of the troubled chip giant soaring.
Swan will be replaced by VMware CEO Pat Gelsinger, which will be a return to familiar halls for Gelsinger. Indeed, Gelsinger was chief technology officer (CTO) of Intel and senior VP and general manager of the Digital Enterprise Group at Intel, prior to him leaving to join EMC, before before becoming VMware CEO in 2012.
The announcement by Intel that Bob Swan was stepping down in mid February sent shares in Intel up by 13 percent, while VMware shares fell 5 percent.
Bob Swan was Intel’s CFO before he took over as interim CEO, when former chief executive and Intel veteran Brian Krzanich stepped down in June 2018.
Krzanich had stepped down after the company learned of a consensual relationship between Krzanich and an employee.
That relationship violated Intel’s non-fraternisation policy, which applies to all managers.
Bob Swan was officially confirmed as CEO in January 2019, but his tenure has not been an easy one.
Intel has witnessed intense competition from AMD, and indeed Intel has not been the automatic first choice amongst consumers for CPUs for high-end gaming PCs for a number of years now.
Apple meanwhile has opted to use its own proprietary CPUs in its Mac computers, ending a 15-year partnership with Intel for its chip supplies.
Matters began to come to a head last month, when activist hedge fund Third Point LLC urged Intel to explore its strategic alternatives going forward.
The call for a reassessment from disgruntled shareholders was hardly surprising.
In July 2020 graphics chip powerhouse Nvidia overtook Intel in value, after its share price rose higher, pushing its market capitalisation above that of its rival.
“Intel today announced that its board of directors has appointed 40-year technology industry leader Pat Gelsinger as its new chief executive officer, effective Feb. 15, 2021” announced Intel. “Gelsinger will also join the Intel board of directors upon assuming the role. He will succeed Bob Swan, who will remain CEO until Feb. 15.”
Gelsinger is a highly respected CEO and industry veteran with more than four decades of technology and leadership experience, including 30 years at Intel where he began his career, said the chip giant.
“Pat is a proven technology leader with a distinguished track record of innovation, talent development, and a deep knowledge of Intel,” said Omar Ishrak, independent chairman of the Intel board. “He will continue a values-based cultural leadership approach with a hyper focus on operational execution.”
And it is clear that Swan has been pushed out by Intel’s board of directors.
“After careful consideration, the board concluded that now is the right time to make this leadership change to draw on Pat’s technology and engineering expertise during this critical period of transformation at Intel,” said Ishrak. “The board is confident that Pat, together with the rest of the leadership team, will ensure strong execution of Intel’s strategy to build on its product leadership and take advantage of the significant opportunities ahead as it continues to transform from a CPU to a multi-architecture XPU company.”
“I am thrilled to rejoin and lead Intel forward at this important time for the company, our industry and our nation,” said Gelsinger. “Having begun my career at Intel and learned at the feet of Grove, Noyce and Moore, it’s my privilege and honor to return in this leadership capacity.”
“I have tremendous regard for the company’s rich history and powerful technologies that have created the world’s digital infrastructure, said Gelsinger. “I believe Intel has significant potential to continue to reshape the future of technology and look forward to working with the incredibly talented global Intel team to accelerate innovation and create value for our customers and shareholders.”
“The board and I deeply appreciate Bob Swan for his leadership and significant contributions through this period of transformation for Intel,” continued Ishrak. “He leaves Intel in a strong strategic and financial position, and we thank him for his ongoing guidance as he works with Pat to ensure the leadership transition is seamless.”
But there no sign of sour grapes from the departing Swan.
“My goal over the past two years has been to position Intel for a new era of distributed intelligence, improving execution to strengthen our core CPU franchise and extending our reach to accelerate growth,” said Swan.
“With significant progress made across those priorities, we’re now at the right juncture to make this transition to the next leader of Intel,” he added. “I am fully supportive of the board’s selection of Pat and have great confidence that, under his leadership and the rest of the management team, Intel will continue to lead the market as one of the world’s most influential technology companies.”
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