Intel shakes up senior ranks, organizational structure 26 July, 2006 By Liam Lahey

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The news comes on the heels of two consecutively disappointing financial quarters. Intel said its net income fell 57 percent to $885 million (US) in the second quarter of 2006 (2Q06) and it reported revenues of $8 billion, a 13 percent decline versus last year.

The company is currently in a slump resulting in missed earnings, faltering efforts, sold-off business units, layoffs in the thousands, and more layoffs planned, remarked Charles King, president and principal analyst for Pund-IT Inc. He also said Intel's recently released Itanium 2 chips are late to the table by about a year and the platform's prospects have been complicated by the continuing rise of 64-bit x86 computing solutions.

Furthermore, Intel has lost ground to rival Advanced Micro Devices Inc. in recent quarters thanks to the continued growth of AMD's Opteron processor line, said Warren Shiau, associate partner and senior IT analyst for The Strategic Counsel.

"Intel has lame-duck chip family issues. It happens to everyone, but it is probably accentuated in this case because the new designs have been highly anticipated, and because people are a lot more willing to consider or buy AMD these days," he said.

Of Intel's corporate changes, Shiau said they are not simply a shuffle; it's also a re-think about how Intel is being managed from an efficiency perspective.

"The common theme is trying to get faster decision making and cutting out some bureaucracy by putting one person in charge instead of having group of co-managers," he added.

Intel officials said the senior management changes focused on improving the company's structure to achieve faster and better decision-making.

"The moves announced today will help us speed decision making and bring new resources to bear in critical areas, while allowing me to spend more time on key strategic issues," said Intel president and CEO Paul Otellini.

Two long-time veterans will retire, but will stay on through the end of the year to ensure an orderly transition. They are William Siu, a 26-year Intel veteran who served as vice president and general manager of the Channel Platforms Group, and Richard Wirt, who has 25 years of service and is vice president, senior fellow and co-general manager of the Software and Solutions Group. With the impending retirement of Siu, the Channel Platforms Group will report to Maloney in the Sales and Marketing Group. A general manager for the Channel Platforms Group will be named at a later date. Renee James, vice president and co-general manager of the Software and Solutions Group, will continue to manage the group following Wirt's retirement at the end of the year.

The sales and marketing department has seen the biggest overhaul, as the two-headed leadership team has been replaced by one new person. Sean Maloney, who previously co-managed the company's Mobility Group, is the new man at the helm as chief sales and marketing officer. Rumours persist Maloney may be groomed as Otellini's successor.

"It's probably premature to say Maloney will be the next CEO -- they'll at least want him to prove himself as the sales and marketing head for a few years as Otellini did before 'anointing' him," Shiau said.

The two previous co-general managers of sales and marketing have been reassigned. Anand Chandrasekher has been shifted to a newly created business unit focused on low-power Intel Architecture products and the ultra-mobile PC market, while Eric Kim has been appointed general manager of the Digital Home Group.

Senior Vice President David Perlmutter, will continue as the sole general manager of the Mobility Group. The former general manager of the Digital Home Group, Don MacDonald, will become vice president of corporate brands and marketing. Pat Gelsinger continues as the head of Intel's Digital Enterprise Group.

"Intel has been losing out in both servers and desktop," Shiau continued. "One of the big battles they're having with AMD is in the channel. So even though no new channel manager has been named it's highly unlikely there's cause for concern over Intel leaving its channel management unfilled."