Intel’s morale is reportedly ‘in the toilet’ as the chip maker strives to be ‘really lean, fast moving’
Intel’s woes the last decade or so are well-enough documented. So, it’s not a huge surprise to find a former senior Intel manager describing morale as being “in the toilet.” But it hits hard, all the same.
A new feature on Fortune.com outlines Intel’s current problems and provides a glimpse of the huge effort it’s going to take to truly turn things around. Perhaps one of the most difficult challenges involves staff, both inside and outside the company.
On the one hand, staff inside Intel are said to be demoralised. It’s a, “heads-down, push-through situation. That spark in people’s eyes, the desire to do this work, was not there,” said the same former Intel insider of the company’s recent predicament.
At the same time, attracting new talent to what’s seen as a sinking ship is going to be extremely difficult. Intel is no longer the top destination for the “brightest minds” in engineering. “Most people want to be part of a growth story, not a turnaround story,” another former senior Intel manager is quoted as saying.
Fortune notes that Intel’s latest CEO Lip Bu Tan has touted new engineering hires as evidence of the progress being made. But that reportedly hasn’t landed well inside the company. “The message the employees got was: He’s bringing in people who are going to get paid way more than you are, and you’re losing your job,” an Intel insider is quoted as commenting.
Anywho, the feature provides an interesting overview of how the company got into its current mess, chronicling Intel’s shift away from being engineering-led to being finance-driven, recounting several major missteps, including the fateful decision not to make chips for Apple’s then-new iPhone and Intel’s more recent failure to get to grips with the AI industry.
It covers off the latest developments, too, including that stunning Intel-Nvidia deal and the scepticism with which some employees apparently view the US government’s new 10% stake in the company.
It also touches on Lip Bu Tan’s plan to emulate Nvidia with a “lean, fast moving” culture while also revealing how Tan’s bombshell announcement that Intel would only continue to invest in its upcoming 14A node if there was sufficient customer interest landed as a “shock to the system” for some insiders. That is a huge change from Intel’s traditional “build it and they will come” approach to R&D.
All told, Intel is shaping up to be something of a case study in corporate malaise. Can Intel turn it around. Ironically, perhaps the most positive role model for Intel right now is also its arch rival, AMD.
As recently as 2015, financial analysts were predicting AMD would be bust by 2020. “We contend that Advanced Micro Devices Inc., (AMD) one of Silicon Valley’s semiconductor success stories, will file for bankruptcy by 2020,” one analyst report claimed, before concluding, “time is missing for a successful transformation. With an uncompetitive product portfolio, several structural challenges coupled with poor positioning (resulting from an ineffective strategy), little hope is left for AMD given its worsening balance sheet. In our view, the conditions we outlined support our case that AMD is a true ‘0’ and we do not foresee the company surviving beyond 2020.”
That was just after a certain Lisa Su was appointed CEO of AMD. Fast forward just over a decade and AMD’s market capitalisation or the company’s total worth has grown over 100 fold, from around $2 billion to $267 billion at the time of writing.
Over the same period, Intel’s market cap is slightly lower today at $172 billion than its $180 billion 2015 peak. And that’s only thanks to a recent spike following the Nvidia deal announcement. Earlier this year, Intel’s worth had sunk below $80 billion.
Still, one thing seems for sure. The Intel will be the subject of business classes for years to come. It’s just not clear yet if the company will be a case study in how to turn around a large organisation in decline or a solemn warning of how a once great corporation can fall from financial grace.
Top Oct Prime Day deals
