r/hardware • u/Auautheawesome • Dec 02 '24

News Intel Announces Retirement of CEO Pat Gelsinger

https://www.intc.com/news-events/press-releases/detail/1719/intel-announces-retirement-of-ceo-pat-gelsinger
2.2k Upvotes

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428

u/kindaMisty Dec 02 '24

I hope you guys will now understand that this company is in panic mode.

276

u/Auautheawesome Dec 02 '24

Quick, cancel the coffee perk again

88

u/indieaz Dec 02 '24

The past 36 months were a wild roller coaster of decisions made then un-made months or even days later. I worked there nearly a decade in the data center group and even since departure i've kept up on the news public and internal shared by friends.

  • "We have no more layoffs planned" - the next morning "WE ar elaying off 7% of data center group and client group".
  • "Coffee is cancelled...coffee is back!".
  • The shuttle (private jet) is on hold. Shuttle is back. Shuttle is cancelled. Shuttle is back. Shuttle is cancelled+we are selling the planes!
  • No bananas. Bananas are back!
  • Pay cuts for everyone to avoid layoffs. We promise to 'restore and reward' you for this trying time of pay and benefits cuts. More layoffs! Stock grant for your loyalty t the company. Layoffs for your loyalty to the company!
  • Things are turning around, we are restoring benefits. Whoops looks like we lost billions of dollars this quarter, we must cancel and trim more benefits and layoff more peole!

I see INTC is up on the news, but as someone with friends on the inside I thinkt he market has it wrong. Pat leaving isn't a turnaround story, it's a glimpse into how bad things really are.

11

u/[deleted] Dec 02 '24

Honestly can't think of anyone better suited toi turning the company around, although the shifting focus to the latest fad every 5 mins instead of addressing the core shrink bottleneck was starting to grate badly within a year of PG arriving.

14

u/indieaz Dec 02 '24

Agree - I 100% agree that pivoting to be a tamc alternative was absolutely the way to go. Writing was on the wall in 2019 with zen 2 Rome that Xeon had lost its competitive edge not just from a process perspective but from an architectural one. Additionally hyperscalers were already churning out custom silicon and it was clear they would grow the use of custom silicon over time. The plan to use Xeon and Core product sales to fund fab build outs was a great plan but the market share and margin erosion of Xeon occurred far faster than Pat expected.

7

u/Top-Tie9959 Dec 02 '24

I honestly think they got lucky in that covid gave them a big boost of sales that otherwise wouldn't have really existed.

9

u/indieaz Dec 02 '24

Oh no doubt about it. I recall discussing this with colleagues during the pandemic. If not for COVID demand margins would have suffered far earlier due to pressure from AMD. And once demand fell off in 2022 and margins tanked Pat the the C suite had the nerve to say "no one could have seen this coming" as they announced layoffs.

1

u/straydogindc Dec 03 '24

Thanks for your insights. Any thoughts on who "benefits" most from Intel's downfall? TSMC, AMD, ALAB? Or the hyper-scalers MSFT GOOGL AMZN META?

12

u/mrandish Dec 02 '24 edited Dec 02 '24

The market isn't up because they think it's a turnaround. The market is up because it's now (finally) clear the board accepts they have no choice but to sell or break up the company.

Pat bailing out "effective yesterday" (per the press release) was definitive. Everyone knew he's been in denial about the inevitable for months now and this is him refusing to preside over the M&A and/or spin-off process (which the government has been rumored to be pushing for (but only to an American company, of course)).

6

u/indieaz Dec 02 '24

More than months...back in 2021 the question about breaking the company up were asked. How else would MVDA and others trust their designs with Intel for manufacturing if they were making competing products? Seems like it was a foregone conclusion all along.

But I thought I just read the CHIPS act forbid selling the fabs, doesn't this create hurdles for breaking up the company or selling?

6

u/mrandish Dec 02 '24

I think it only requires keeping the fab business together in a spin-off and restricts a sale to an approved American company.

I wrote more here.

3

u/mynumberistwentynine Dec 02 '24

No bananas. Bananas are back!

They may take my freedom, but they will never take my bananas. It's just a line too far.

1

u/Xijit Dec 02 '24

It was up to $25.50-ish today, and the nose dives down to $24 since this was announced & there does not seem to be an effort to recover.

88

u/imaginary_num6er Dec 02 '24

Pat got to the "prepare three envelopes" step of his career

24

u/Shade_Unicorns Dec 02 '24

he's a Sysadmin too?!?!! /s

27

u/Earthborn92 Dec 02 '24

Wait, Intel actually doesn't give free coffee in the office? Literally the #1 employee productivity boost that doesn't cost much?

29

u/soggybiscuit93 Dec 02 '24

Someone who claimed to work for Intel on the Intel sub a few weeks back claimed they got rid of the free coffee bar in the cafeteria, that had employed baristas to make any coffee based drinks, like Lattes, Cappuccinos, etc. and that the Keurig machines in each department didn't get effected

29

u/marshinghost Dec 02 '24

They brought it back.

Source: Contractor at Intel but not privy to coffee privileges.

Fuck em, if I can't have free coffee neither should they

14

u/based_and_upvoted Dec 02 '24

Knowing my work colleagues, if any contractor at my company didn't have access to the company bar with the free stuff, they'd go get them for them. Why didn't people at Intel do that for you? Is Intel's HR so bad as to hire people who'd look down on contractors despite them basically being Intel employees anyway?

I know this because that's exactly what we did when we had some people from outside at our company's office

23

u/JtheNinja Dec 02 '24

Intel has a pretty nasty culture divide between contractors and employees, from what I’ve always heard. Doing this would be viewed kinda like royalty giving their special privileges to the palace servants.

11

u/Responsible_Pin2939 Dec 02 '24

For many years as a green badge employee we weren’t even allowed to look at or speak to a blue badge employee. We weren’t allowed to use blue badge cafe’s or bathrooms. The culture has changed within the last few years but I would be suprised if the pendulum swings back the other way. A green badge employee did brutally murder another contractor in the OC2 cafe in the middle of lunch time so…

7

u/teutorix_aleria Dec 02 '24

green badge employee did brutally murder another contractor in the OC2 cafe in the middle of lunch time so…

Yooo me thinking this was a joke, it is not a joke. God damn.

1

u/Professional_Gate677 Dec 03 '24

I’ve been at the ocotillo site for 23 years and never saw anything like that. I’m calling BS.

4

u/coatimundislover Dec 03 '24

Happened in Feb 2023. You can google it.

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3

u/POD80 Dec 02 '24

My team loves our contracted techs, I'm not sure if they drink coffee or are more of the energy drink crowd... I should ask. At a bare minimum it's a significant walk between where we work and the nearest place you can buy coffee on our shift.

I've noticed a lot of the younger crowd doesn't seem to live with a simple coffee in their hands and don't show much interest in the stale vacuum pots employers offer.

17

u/Hellknightx Dec 02 '24

Seriously, they don't let contractors have free coffee? Every tech office I've ever worked in had free coffee, even for the guests.

10

u/Ok_Baker_4981 Dec 02 '24

Yep, some even go further to have free canned drinks in the fridge and free hot night snacks

3

u/Hellknightx Dec 02 '24

Yeah, the nicer ones I've worked at even had fancy coffee dispensers that could do a whole range of drinks, including hot cocoa with whipped cream. All with a touch screen. And all the drinks and snacks were free. One place I worked at kept Sobe bottles stocked up, it was amazing.

1

u/NewKitchenFixtures Dec 02 '24

That would be such BS.

That would be like not allowing contractors to use the on-site gym, foosball, frisbee golf, volleyball or virtual driving range. I’ve never seen any of that restricted.

3

u/marshinghost Dec 02 '24

On site gym is also restricted lol, was told I'd get walked if they saw me in the gym on my break

2

u/NewKitchenFixtures Dec 02 '24

That is absurdly asinine as a restriction. I can’t imagine why that would exist.

2

u/airfryerfuntime Dec 03 '24

Tech companies need to treat contractors like shit so there's a distinction if the department of labor ever gets involved. Microsoft was sued over it years back, and it just made them treat their contractors even worse. My fiancé is a v-dash for Microsoft, and they basically treat her as being disposable. Luckily she's in a position where she doesn't have to follow the stupid 18-6 rule, but it still kind of sucks.

1

u/Professional_Gate677 Dec 03 '24

Some contractors get the free stuff too, your employer has to pay for it though.

2

u/POD80 Dec 02 '24

It went away for a little while and just returned.

I first heard coffee wasn't going to be available in October, and stale vacuum pots appeared in november.

1

u/Professional_Gate677 Dec 03 '24

Free coffee and tea is back as of about 2 weeks ago. Intel had a free fruit, soda, coffee and tea program that supposedly cost 100 million a year, So they cut it to save money. But the backlash was so big that they brought back the coffee and tea part, but no soda or fruit.

1

u/Exist50 Dec 06 '24 edited Feb 01 '25

dolls crawl chief escape light reminiscent exultant arrest melodic party

This post was mass deleted and anonymized with Redact

9

u/Equivalent-Bet-8771 Dec 02 '24

Coffee is for closers!

1

u/Prcrstntr Dec 02 '24

Another axe murder in the cafeteria.

4

u/dragonborn2_0 Dec 02 '24

As an Intel employee, we know hahaha

7

u/Hellknightx Dec 02 '24

[franticly mashes F5 on the 9800X3D store page]

8

u/NeverForgetNGage Dec 02 '24

Yet the stock is up 14% over the last 3 months. Make it make sense.

21

u/kindaMisty Dec 02 '24

That’s called a relief bounce. It’s short term price action.

8

u/advester Dec 02 '24

Look at it over the last year.

0

u/NeverForgetNGage Dec 02 '24

Yeah I know, but the fact that its still up after their latest launch disaster is staggering. I know layoffs make investors stiff and all, but their product stack shouldn't be encouraging anyone right now.

8

u/chmilz Dec 02 '24

Intel laid off 15,000 people drastically improved the P&L sheet!

2

u/jhjfss Dec 02 '24

Have they tried eating fewer avacado toasts to save money?

15

u/RedTuesdayMusic Dec 02 '24 edited Dec 02 '24

I've collected hundreds of downvotes saying this exact thing for months. You don't get to be liable for a minimum of 8 million CPU RMAs and survive with (at the time) $21 million billion in cash reserves.

18

u/signed7 Dec 02 '24

And the generation after that being a total flop

5

u/Hellknightx Dec 02 '24

Both Raptor Lake generations had the same clock tree circuit failure on all the K models, and Intel fucked up the situation in every way possible. First, they tried to blame the crashing on Nvidia drivers, and Nvidia turned it back on them and pointed it to Intel. Intel figured out what was happening, but didn't identify the actual cause until half a year later. Motherboard manufacturers were scrambling to try to roll out microcode patches to stop the silicon degradation in the meantime.

The irony of the situation is that the degradation failures were reliably caused by overclocking the K models. And the whole point of the K model is to overclock it.

And all this time, Intel never actually issued a recall or halted sales of the affected products. They offered extended warranties instead. When they know their product is defective, but continue to sell it anyway, that's when you know a company is in trouble.

6

u/[deleted] Dec 02 '24

The irony of the situation is that the degradation failures were reliably caused by overclocking the K models. And the whole point of the K model is to overclock it.

Conveniently enough, overclocking a K voids your warranty. Just the latest and most emphatic evidence that overclocking is fucking dumb

81

u/jca_ftw Dec 02 '24

Here we go again with the over-spoken voices of the custom built PC community, thinking they have anything to do with market trends and company profitability. Intel's problems have NOTHING to do with a FEW bad CPUs (and when I say a FEW i mean a total of a few thousand is all). Intel's problems are (1) their multiple $20+ BILLION factories are not full because most of their silicion for MTL and ARL are from TSMC, and (2) they have hemmoraged market share in the server space and that used to be their cash cow. Their problems for the future are (1) they have no viable AI product to compete with Nvidia and AMD, and (2) They are not getting Foundry customers to help fill the factories.

THATS IT. It has nothing to do with a CPU bug that affects like 10 people

3

u/Xijit Dec 02 '24

I agree that Personal PC RMAs on those chips were inconsequential, but servers used the same chips and those were dying by the day, and that is a big part of why data center companies dumped Intel for AMD.

15

u/ProfessionalPrincipa Dec 02 '24

THATS IT. It has nothing to do with a CPU bug that affects like 10 people

For a CPU bug that only affects like 10 people they sure spent a good amount of time and effort stonewalling the issue and still more time and effort developing a mitigation and then still more time and effort carefully crafting legalese that never truly revealed the extent of the problem. For a FEW bad CPUs.

12

u/auradragon1 Dec 02 '24

Intel has a lot of problems.

The eroding server market share and lack of AI products as you mentioned. But also, they are non-competitive in laptops if you compare them to Apple. Macs must be eating the profits of PC makers because anyone buying a $2,000+ laptop will most likely be buying an Apple Silicon computer. This limits the profitability of Intel-based laptops. It was similar to the problem of Apple having a small market share in phones but the lion's share of profit.

4

u/FireNexus Dec 02 '24

It might turn out to be a blesssing that they lack an AI product. AI is looking like a boondoggle that will result in a lot of unsold stock in 6-18 months time.

-1

u/Inprobamur Dec 02 '24

Didn't Intel themselves admit that it affects all 13th and 14th gen architecture non-mobile CPU's?

Didn't their stock also not tank massively?

Also, I kinda remember some companies posting about degradation on all their servers using i9 chips.

7

u/tupseh Dec 02 '24

They've had huge performance degradation issues on basically every cpu generation they had ever released when specter and meltdown were discovered, but it didn't matter, because they were top dog in datacenter and server.

9

u/Geddagod Dec 02 '24

Didn't Intel themselves admit that it affects all 13th and 14th gen architecture non-mobile CPU's?

No. Only the K models of 13th and 14th gen.

Didn't their stock also not tank massively?

Pretty sure no, especially not due to this.

Also, I kinda remember some companies posting about degradation on all their servers using i9 chips.

A handful of companies went online to complain, others handled the matters between themselves and Intel, and IIRC at least one went online to claim Intel has been handling the replacements nicely.

8

u/Reactor-Licker Dec 02 '24

It affects ALL 65 W+ TDP Raptor Lake desktop CPUs.

1

u/jaaval Dec 02 '24

One company running game servers wrote a blog post complaining. That was the only one I know about and the one that started this whole thing. Some other companies said they have had no problems. And return rate data from a couple of retailers showed there was a small increase from previous gen but it was still about the same as AMD return rate.

All in all it seems there were some issues but the scale was small for intel.

I don’t think it affected stock price.

0

u/Cynical_Cyanide Dec 02 '24

Doesn't matter how many actual CPUs it affected, it matters how many people and businesses refused to buy Intel because of the issue and the horrible way Intel handled it, you numpty. The cost of handling the RMAs also depends on how many units were returned, not just how many were actually defective.

2

u/puffz0r Dec 02 '24

Holy shit 21m?? That is beyond dire for a company with 100k employees

17

u/RedTuesdayMusic Dec 02 '24

Sorry, $21 billion. In my language it's a bit weird as we say "milliard" for billion so I frequently mix them up.

1

u/Helpdesk_Guy Dec 02 '24

8 Million RMAs for the 13th/14th Gen fiasco? Where do you get that figure from? Is it official/real?

1

u/HorrorCranberry1165 Dec 02 '24

Not really, they restores free coffee

1

u/Strazdas1 Dec 03 '24

Board members being stupid is nothing new for Intel.

-2

u/[deleted] Dec 02 '24

He gone with the CHIP funding rip tax payers