Intel Reorganizes Into Five Business Divisions
Intel Corp. reorganized its corporate structure Monday, creating business units focused on mobile electronics, corporations and homes and eliminating a money-losing group centered on communications.
In a move that comes months before the succession of a new chief executive, the world’s largest chip maker also shook up its product and sales management team and said the company’s vice president of sales, Jason Chen, was leaving the company to attend to a family health matter.
Before the changes, the Santa Clara, Calif.-based company was divided into two major businesses, one for its computer chips and one for its communications products. But in recent years, the line between computing and communications has blurred, with notebook computers now including wireless radios and some cellular phones now as powerful as older PCs.
The communications group had an operating loss of $791 million last year. Its product lines, primarily for mobile phones and networking equipment, will be distributed among the five new business units.
The reorganization, creating groups for mobility, enterprise, home, health and global markets, follows a plan to build “platforms,” or bundles, of Intel chips and software for various technology markets.
The “platformization” of Intel is a mantra of company President Paul Otellini, who will take over as chief executive this year from Craig Barrett, 65, who has reached the company’s mandatory retirement age.
The reorganization is perceived as one of Otellini’s first big moves as the designated heir to one of the world’s most powerful technology companies.
“This is just the beginning of many major transformations they’re going to have with Craig leaving,” said Apjit Walia, an analyst with RBC Capital Markets, who expects Otellini to seek out companies to acquire in the communications space.
Intel, which delayed several products and canceled an initiative to develop chips for televisions, has said it has recovered from product blunders that helped push its stock down by nearly a third last year.
Last week, the company reported $34 billion in annual sales, boosting its stock. Intel’s shares closed Friday at $23.02, up 20 cents, on Nasdaq.
The chip maker did not announce any financial charges or cost savings from the restructuring. Spokesman Tom Beermann said Intel was trying to determine whether and how the changes would affect the financial reporting of its business units.
Separately, Intel on Wednesday is expected to launch an upgrade of its popular Centrino technology for notebook computers.
