A major American tech firm is on the brink after its CEO was forced out following a mass layoff of 15 per cent of his company's staff.
Pat Gelsinger, former CEO of Intel, resigned after less than four years in the role, having taken it on in February 2021. During his tenure, Intel's stock fell by 61%, culminating in a massive restructuring effort that began in August aimed at slashing $10 billion in costs and 'fundamentally change the way we operate', Gelsinger said at the time.
"Fundamentally change the way we operate," Gelsinger said at the time.
He will be replaced on an interim basis by David Zinsner, Intel's chief financial officer, and Michelle Johnston Holthaus, general manager of Intel's client computing group, as the company searches for a new leader. The interim CEOs will now have to play catch-up to other chip manufacturers like Taiwan's TSMC.
Once the biggest computer chip manufacturer in the world, it missed the mark in 2022 when it failed to invest in chips that can power AI datacentres. Instead, Nvidia bet big on AI and is now worth $3.4 trillion - 33 times as much as Intel.
Despite being on the back foot, Intel does have backing from the federal government. Under Joe Biden’s administration there has been a keen interest to aggressively grow America's chip manufacturing sector to wrestle back control from Asia.
"An $8.5 billion grant under the CHIPS Act would be reduced to $7.86 billion but made up for by a separate $3 billion grant from the government," announced last week by Intel.
Intel's major C-suite shakeup comes after Meta slashed a large number of jobs from Instagram, WhatsApp and Reality Labs. A Meta spokesperson told Reuters:
"This includes moving some teams to different locations and moving some employees to different roles. In situations like these when a role is eliminated, we work hard to find other opportunities for impacted employees."
The Verge report did not specify exact numbers but mentioned they were small. Meta also did not comment on numbers.
Meta has slashed around 21,000 jobs since November 2022 with CEO Mark Zuckerberg calling 2023 "the Year of Efficiency." Meta shares have jumped more than 60% this year after he cancelled several low-priority projects boosting growth and allaying investors' fears over spending too much money on metaverse projects.