Lip-Bu Tan, a high-profile Intel board member, suddenly resigned after problems with CEO Pat Gelsinger and other directors over what he thought was Intel’s bloated workforce, risk-averse culture, and lagging artificial intelligence strategy, according to sources familiar with the case.
Lip-Bu Tan, a semiconductor industry veteran, first showed that his departure was due to a personal decision to “reconsider various commitments” while remaining “supportive of the company and its important work,” according to a regulatory filing released on Thursday.
Tan, who joined Intel’s board of directors two years ago to help the company regain its global chip market leadership, will be given additional responsibilities in October 2023 to manage production operations. Tan, on the other hand, became less happy with Intel’s big staff, attitude toward contract manufacturing, and what he saw as a bureaucratic and risk-averse culture.
Tan’s exit details have not previously been disclosed. His departure, which many see as a huge loss, shows the hurdles Intel faces in its ongoing turnaround attempts. Intel is currently experiencing one of the most difficult periods in its history, making it subject to activist shareholder measures. In response, the company hired Morgan Stanley to develop a defensive strategy.
Intel’s problems are exacerbated by its competitors’ constant advances, particularly in the growing artificial intelligence industry. Despite purchasing AI startups and creating AI processors, Intel has had setbacks, including the departure of senior executives from its AI division.
Tan’s resignation also reflects internal conflicts about staff management. Tan believed the organization was overstaffed, particularly with middle management, who, he felt, slowed growth. Intel, which recruited over 20,000 employees during Gelsinger’s tenure, recently announced layoffs affecting more than 15% of its staff.
Despite Intel’s ongoing efforts to develop its foundry business and establish additional plants, the company has been unable to gain important external clients and has suffered contract manufacturing issues, further complicating its turnaround strategy.
Intel declined to comment on the topic, and Tan’s venture capital firm, Walden Catalyst, did not reply to inquiries.
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