71–80 of 137 posts
Suspending the dividend is poetic in a sense. They'd been taken over by bean counters decades ago and slowly pissed away their privileged position at the top of computing. They essentially ended up where Boeing did, but at least didn't kill anybody.
This sounds worryingly like “sales are down, cut costs to maintain profitability to spike our stock numbers” and not enough focus on what I believe is actually wrong, which is that they can’t seem to reliably make competitive processors in a stiff market. Anyone else feel like this is bean counters at Intel playing the wrong game? I personally feel like leadership at Intel lost the plot almost a decade ago.
10 years from now, when the downfall of Intel is being taught at business schools, what are going to be the big takeways and now-obvious mistakes?
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The ‘flagged dead’ comment is right on. Intel has been a bloated bureaucracy for a long time now and things need to get tightened up for it to continue.
I agree, so I am quoting it, below: >Fire 80% of them. Twitter had probably more talent per capita than Intel. If they can fire 80% most companies should.
Suspending the dividend is poetic in a sense. They'd been taken over by bean counters decades ago and slowly pissed away their privileged position at the top of computing. They essentially ended up where Boeing did, but at least didn't kill anybody.
A lesson that has to be taught again and again. You can run a business into the ground but look great for years on inertia alone. Intel has been crumbling for a long while but the inertia of previous decades meant it wasn't apparent.
This sounds worryingly like “sales are down, cut costs to maintain profitability to spike our stock numbers” and not enough focus on what I believe is actually wrong, which is that they can’t seem to reliably make competitive processors in a stiff market. Anyone else feel like this is bean counters at Intel playing the wrong game? I personally feel like leadership at Intel lost the plot almost a decade ago.
We have very little understanding of the bloat that Intel might be carrying, or the projects they have underway that were not making progress or perhaps not the innovation expected. Financial reports are going to be exactly that, focused on the numbers and appearing to investors to be maximising their value. You want to carry a perception that you are focusing on the positives and the innovations being carries forwar…
so, empty platitudes that turn into none or negative change. Gotta love the modern day business.
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Leadership changed back to an engineer with the return of Pat Gelsinger in 2021. I’d give him a couple more years. It takes time to turn around a big ship like Intel.
Everyone around here keeps talking about how the problem of Intel is that it was a Business guy running the company and not an engineer, and it feels so similar to when people claimed Phil Spencer was going to save Xbox. Truth is, Pat is doing nothing despite the generous government subsidies
Well, he did. He bought up a ton of studios and focused on games again. in 2014 they were completely tonedeaf to the state of not just games, but media as a whole. Cable box subscriptions even in 2014 for their 8th generation console was just horrible optics.
Now, is it his fault directly that the game development per studio is slow, or the releases uneven? He's probably not blameless, but MS isn't really known to intervene nor micromanage their studios. IMO that's a much bigger issue than any single MS studio.
$152 billion in stock buybacks. We don't have an economy anymore, we are just handing money to the ultra-wealthy. US. Total economic collapse. Hard landing. This is the beginning of the end. We really had the chance to make something beautiful with this country, but the 1% bought and sold it into the ground. Half our politicians aren't even trying to keep it running anymore.
Like if you just don't like stock markets or capitalism in general, that's fine, but that doesn't have anything to do with stock buybacks.
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10 years from now, when the downfall of Intel is being taught at business schools, what are going to be the big takeways and now-obvious mistakes?
Thinking they were in a stable situation and going into max cashflow mode when there were in a death match. If you look at stock standard competitive theory (like, without any nuance) like Porter, you can see their situation getting really hairy starting 15 years ago. Customer concentration (public clouds), substitute products (arm in servers for standard workflows, various others in AI workloads etc), competition in…
Interesting that oligopsony beats oligopoly :-)
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I agree, so I am quoting it, below: >Fire 80% of them. Twitter had probably more talent per capita than Intel. If they can fire 80% most companies should.
Twitter has dropped in value almost 80% since Musk bought it. Twitter is this weird zombie unicorn which keeps attracting money while mostly losing money on net. I don't think its useful to use it as an example.
The only reason Twitter isn't a dead husk is because network effects are really damn strong. That's it. The attrition to Bluesky or Mastodon or whatever won't be as drastic as the Myspace days when single percentages of the current internet populace were connected.
You don't get network effects with hardware, especially since most people these days buy laptops and won't bother to specify an intel chip (if available at all).
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In my opinion, one the most reliable signs is when companies stop repeatedly investing into their product innovation. The moment they start behaving like an established behemoth (monopoly/oligopoly) and you see repeated stock buybacks and frequent layoffs, the end is coming. This applies to most large, inefficient corporations that get too comfy with success and forget how to pivot fast, take risks, and fiercely figh…
Intel has put literally hundreds of billions of dollars into R&D annually in the past decade. Last year alone it was more than $16 billion. That's one of the highest annual R&D spends of any company in the entire US. Nvidia for comparison is less than half that per year.