A Warning to Boomerang CEOs: The Honeymoon Can End Abruptly
The sudden departure of Pat Gelsinger as CEO of Intel serves as a stark reminder that even when a company welcomes back a former executive with open arms, the relationship can quickly turn sour.
A Sudden Exit
Intel’s board of directors announced Gelsinger’s retirement as chief executive, effective immediately, without naming a successor. Instead, two executives were appointed as interim co-CEOs, and Gelsinger stepped down from the board. The move left little room for interpretation that he was forced out.
A Strategic Shift
According to Jo-Ellen Pozner, associate professor of management at the Leavey School of Business at Santa Clara University, companies often make bold statements like this to signal a significant change in direction. The removal of Gelsinger from the board, in particular, suggests that the company is serious about shaking things up.
A Turnaround Gone Wrong
Gelsinger’s return to Intel in 2021 was meant to be a homecoming of sorts. He had spent decades at the company before leaving to lead VMware in 2009. As CEO, he laid out an ambitious plan to revamp Intel’s chip manufacturing and sales strategy. However, despite investing billions, including subsidies from the Biden administration’s CHIPS and Science Act, the company had little to show for it.
Loss of Confidence
The board’s frustration with Gelsinger’s slow progress in catching up with competitor Nvidia ultimately led to his downfall. Qualcomm reportedly saw Intel as a potential takeover target, further eroding confidence in Gelsinger’s leadership.
A Trend of Impatient Boards
Gelsinger joins a growing list of CEOs who have been abruptly fired this year, including Karen Lynch at CVS, Bob Bakish at Paramount Global, and Laxman Narasimhan at Starbucks. According to executive consulting firm Korn Ferry, CEO firings have reached a record high in the first half of 2024.
A Response to Uncertainty
Pozner suggests that boards may be acting hastily in response to profound anxiety about the markets, particularly in the wake of the presidential election and trade policy uncertainty. Companies may be taking big risks to stay ahead, rather than waiting to get caught off guard.
A New Era of Leadership
As Intel looks to the future, it remains to be seen who will take the reins and steer the company back on track. One thing is certain, however: the honeymoon period for boomerang CEOs is officially over.
Leave a Reply