The sudden resignation of a high-profile Intel board member, Lip-Bu Tan, followed disagreements with CEO Pat Gelsinger and other directors over what he saw as Intel’s bloated workforce, risk-averse culture, and lagging artificial intelligence strategy, according to sources familiar with the matter. Tan, a veteran in the semiconductor industry, had initially stated that his departure was due to a personal decision to “reprioritize various commitments,” while remaining “supportive of the company and its important work,” as mentioned in a regulatory filing on Thursday.
Tan, who joined Intel’s board two years ago as part of an effort to restore the company’s leadership in the global chip market, had his responsibilities expanded in October 2023 to oversee manufacturing operations. However, over time, Tan grew increasingly frustrated with Intel’s large workforce, its approach to contract manufacturing, and what he perceived as a bureaucratic and risk-averse culture.
The details surrounding Tan’s departure had not been previously reported. His exit, viewed by many as a significant loss, highlights the challenges Intel faces in its ongoing turnaround efforts. Intel is currently navigating one of the most challenging periods in its history, leaving it vulnerable to potential activist shareholder actions. In response, the company has hired investment bank Morgan Stanley to prepare a defense strategy.
Intel’s struggles are exacerbated by the aggressive advancements of its competitors, particularly in the booming artificial intelligence sector. Despite acquiring AI startups and developing AI chips, Intel has faced setbacks, including the departure of senior leaders from its AI division.
Tan’s departure also underscores internal disagreements over workforce management. Tan believed the company was overstaffed, particularly with middle managers who, in his view, impeded progress. Intel, which added over 20,000 employees under Gelsinger’s leadership, recently announced layoffs affecting more than 15% of its workforce.
Despite Intel’s continued efforts to expand its foundry business and build new factories, the company has yet to secure significant external customers and has faced challenges in contract manufacturing, further complicating its turnaround plan.
Intel declined to comment on the matter, and Tan’s venture capital firm, Walden Catalyst, did not respond to requests for comment.
