Intel Taps Otellini As Next CEO
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Intel&#39;s board has tapped Paul Otellini to replace Craig Barrett as CEO, starting next year, the company announced. By Edward F. Moltzen, CRN.
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Intel Corp. Chief Executive Officer Craig Barrett wanted to go out in glory like his old boss, Andy Grove. Instead, he&#39;ll retire to slumping sales growth, restless investors and repeated product delays.
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(InfoWorld) - Continuing his quest to stop a slide in profits, IntelÂ Chief Executive Paul Otellini announced layoffs of about 7,500 more people onÂ Tuesday. Together withÂ previously announced layoffs of middle-management executivesÂ and the sale of two business units in recent months, the actions will reduce Intel's workforce by a total of 10,500 people by 2008 -- about 10 percent of the entire company. The layoffs will happen in stages. Most job losses that take effect in 2006 have already been announced, including Intel's sale of its media and signaling business in August, the cut of 1,000 executives in July, and the sale of its XScale smartphone chip division in June. Those jobs include workers in management, marketing and IT. Many more cuts will happen in 2007, when Intel chops jobs in manufacturing and product design, improves equipment use and eliminates other redundancies, the company said. The total impact will leave Intel with 92,000 people by the middle of 2007, down from the 102,500 it reported in the second quarter of 2006. By cutting these jobs, the company will save $2 billion in 2007, and $3 billion per year beginning in 2008, Intel said. The cuts were a dramatic move for a company that holds a commanding 80 percent worldwide market share of PC chips andÂ posted a profit of $885 million in the second quarter. Still, the company could have made more money, illustrated by Otellini's recent prediction that Intel would post profits of $9.3 billion for 2006, down from $12.1 billion in 2005. The problem came from slowing growth in the PC market,Â a loss of share to rival Advanced Micro Devices (AMD), and Intel's move to preserve its market share by making deep price reductions on its chips. In response, Otellini told analysts in April he would "restructure, repurpose and resize" the company over the coming quarter. Analysts cheered Otellini's move, saying Intel had become bloated. Otellini can use the new cuts to achieve four goals, said Ted Schadler, vice president for consumer electronics research at Forrester Research Inc. He can eliminate redundant jobs, simplify operations by having fewer products, get out of businesses that don't match Intel's core strengths, and get out of businesses that aren't so profitable, Schadler said. When Otellini succeeded former CEO Craig Barrett in May 2005, he found there was a huge competitor lurking on his left flank -- AMD -- and he saw a company that was no longer a lean machine, but had grown to fill every nook and cranny, Schadler said. "So he eliminated middle management, getting rid of 1,000 executives. And now he's using that as a pry-bar into the organization to say 'Who do we really need?'" said Schadler. "They need to react faster to changing markets. Power [efficiency] is a huge issue, but it took them two years to get a product out the door that was even arguably better. Their road map looks great now, but that's too long." Since meeting with analysts in April, Otellini has also pushed new chips to market faster, resulting in a raft of new chips in recent months, including theÂ "Woodcrest" Xeon 5100 chip for servers in June,Â "Conroe" Core 2 Duo chip for desktops in July andÂ "Merom" Core 2 Duo chip for notebooks in August. Intel also reached for the high-end server market with the new "Tulsa" Xeon and "Montecito" Itanium chips. And with an eye to the future, Intel accelerated the launch of its quad-core chips for desktops and servers, pledging to release them in the fourth quarter of 2006 instead of the first half of 2007. Intel hopes this flood of new products will stop the erosion of its dominant market share. The company manufactured 77.9 percent of all CPUs sold in PCs around the world during the first quarter of 2006, according to Gartner. That number is down from 80.5 percent in the first quarter of 2005 and 81.5 percent in the first quarter of 2004. Â
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(InfoWorld) - The leading quote from this weekâs news comes from Intel CEO Paul Otellini: "We're doing product refreshes every two years, which is the model we invented and then stopped doing after Pentium 4, shame on us," Otellini said. "We fell off it -- mea culpa, we screwed up -- and now we're back on that pace." Otellini was speaking at a Morgan Stanley Technology Conference, but regardless of the venue, every time a CEO speaks, he or she is using analysts and journalists as a conduit to shareholders. When a CEO takes a podium to apologize to shareholders, it tends to be the board of directorsâ idea. This is an obtuse, though profuse apology. The screwup to which Otellini refers is his decision to clear Intelâs shelves of x86 property and dump it on AMD in one drop so that Intel could end the year with a bang, having had the last volley in the CPU wars. It did that. But one could liken Intelâs strategy in latter 2006 to a massive spread of fireworks thatâs sent up simultaneously. Everybody goes nuts at the spectacle of it, but after that brief rush, all thatâs left is silence and smoke, soon followed by the glow of taillights. As tacky as it is to quote oneself, I put Otelliniâs present bind succinctly in a column I wrote last August: âIntel shot its entire wad on Core microarchitecture. From here, the only place Intel can go is bigger cache, more cores, and faster clocks.â Indeed, that sums up Intelâs plans for 2007, and thereâs no swaggering spin, distraction, or buzzword bending that can make up for the enormous technology gap between Core 2 and AMDâs reengineered Barcelona quad-core Opteron. It isnât likely that Intel can play engineering catch-up, given that Otellini has pink-slipped 10,500 workers. Otellini will have more than empty cupboards and empty desks to apologize for. He set a strategy to bulk up Intelâs manufacturing capacity and to jam up AMD by forcing prices down and leaving AMD unable to meet spiked market demand. Market demand is sagging, and if it returns, AMD has the capacity advantage: It has third-party foundries standing ready to stamp out AMD CPUs if need be. Another example of poor judgment is Otelliniâs fixation on CPUs and chip sets. AMDâs acquisition of ATI put Intelâs rival in the high-margin peripherals business as well as a growing role in high-performance chip sets for Intel desktop and notebook PCs. Intelâs hostile attitude toward chip-set makers drove graphics and chip-set giant Nvidia to make surprisingly close ties with AMD despite its purchase of Nvidiaâs sole competitor. If only it ended there. Recently, Intel informed the Delaware Federal District Court that it cannot produce relevant e-mail messages that were exchanged after the filing date of AMDâs antitrust suit. Intelâs letter to the court blames individual human error while heaping detailed praise on executivesâ document retention plan. Buried in the text is the Nixonian counterpoint, âSome of the tapes appear to have been recycled.â Itâs not that Otellini hasnât done anything right. He did put the brakes on NetBurst. He won an exclusive with Apple and got Sun Microsystems to add Intel to its product line. But in the minus column, Otellini lost the companyâs gold medal exclusive PC maker, Dell, and people will wonder whose inboxes those recycled tapes might have contained. Intelâs CEO should be gilding his parachute. If he lasts out the year, it will be because Intelâs board wisely takes its time to choose a replacement. My litmus test? Find someone who believes that Intelâs yearly sponsorship of the A. M. Turing Award matters more than convincing a judge in Delaware that evidence really, truly got lost. And find a CEO who, when he or she apologizes for lousy decisions, uses the pronouns âIâ and âme.â
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SAN FRANCISCO - Intel Corp. President and Chief Operating Officer Paul Otellini served notice at the company's recent developer conference that the megahertz era was coming to a close, and the decision Thursday to remove the 4GHz Pentium 4 processor from its road map is clear evidence that Intel has once and for all kicked its speed habit, according to industry analysts.ADVERTISEMENTSBC Case Study: Crate & BarrelWhat sold them on improving their network? A system that could cut management costs from the get-go. Find out more.
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Intel Corp. , the world's largest computer chipmaker, on Thursday said Chief Executive Craig Barrett plans to step aside and be replaced by President Paul Otellini, in a long-planned move.
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news analysis Intel selects consummate insider as next CEO. Can he take Intel beyond the PC?
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So I'm sitting in the rather vast &quot;press&quot; corner of a CES keynote audience, waiting to see Paul Otellini, President &amp; CEO of Intel, give a keynote. Two years ago I sat at an Otellini keynote here. As I reported in What's Intel up to with VIIV?, it was disappointing. Will this be different? Sure hope so.  read more
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Intel Corp. INTC.O, the world's  largest computer chipmaker, on Thursday said Chief Executive  Craig Barrett plans to step aside and be replaced by President  Paul Otellini, in a long-planned move.
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Intel Corp. President Paul S. Otellini yesterday demonstrated new chips scheduled for release next year that simultaneously run tasks such as burning CDs and playing video games, as he sought to allay concerns about product delays. -Bloomberg News
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Intel CEO Paul Otellini talked about the next Internet generation in his CES keynote speech.
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At an early morning keynote address to open the semi-annual Intel Developers' Forum in San Francisco, CEO Paul Otellini confirmed that a Core 2 Extreme quad-core processor is coming this November for the enthusiast segment of the PC market. But can his performance gain estimates possibly be correct?
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SAN FRANCISCO - Intel Corp. and the PC industry are about to go through a major change in the way client computers are designed, built and marketed, said Intel President and Chief Operating Officer Paul Otellini during his introductory address Tuesday at the Fall Intel Developer Forum in San Francisco.
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SAN JOSE, Calif. - Paul Otellini, a 30-year Intel Corp. veteran who oversaw the launch of the Pentium processor in the 1990s, will replace chief executive Craig Barrett when he steps down to become chairman
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Won't leap until SP1 arrives If it's not good enough for Intel, is it good enough for you? We're talking Microsoft's Windows Vista, which the chip giant's CEO, Paul Otellini, this week indicated has not won the backing of his technology experts.â¦
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update Intel&#39;s board, in widely expected move, voted Thursday to elevate Paul Otellini from president to chief executive officer in May.
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Intel Corp., the world's largest computer chip company, is not suffering from overcapacity and new areas are emerging that will increase global demand for microprocessors, its chief executive said Friday.