Intel launches major reorganization

Upper management ranks to get overhaul following a large layoff and two rough quarters, News.com has learned.

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After two difficult financial quarters, Intel on Wednesday dramatically revamped its upper management, CNET News.com has learned.

Sales and marketing in particular has been shaken up, sources familiar with the changes said. The two previous co-general managers, Anand Chandrasekher and Eric Kim, have been moved to lead different divisions, while Sean Maloney is the sole new leader.

Intel declined to comment for this story. However, employees were told Wednesday and a news announcement is expected Thursday.

Maloney, whom some analysts view as being groomed for even greater management roles at Intel, will get the new title of chief sales and marketing officer.

"There's a good chance" Maloney is an eventual successor for Chief Executive Paul Otellini, said Technology Business Research's Martin Kariithi. "It does make sense. He's been with Intel for awhile. He went through the Andy Grove era."

"Simply put, there will be fewer people making decisions," with a more concentrated organizational structure and more coherent decision-making, said Dean McCarron, an analyst with Mercury Research. "Clearly Intel wanted to make some changes. They have been in an unusually difficult place in terms of their products and competitive position."

Intel announced a major analysis of its business in April in an attempt to improve efficiency and competitiveness. The management changes are one result, along with 1,000 manager layoffs and the sale of a communications chip unit to Marvell Technology Group.

Intel announced a 57 percent drop in net income earlier Wednesday and offered future revenue guidance lower than analyst expectations. However, the company has several stronger new products coming to market to compete more effectively against Advanced Micro Devices.

In the analysis, Intel is examining when it makes sense to employ its "two-in-a-box" management methods. The analysis concluded sales and marketing needs a single leader, a source familiar with the analysis said.

Among other changes in the Intel reorganization:

• David "Dadi" Perlmutter, who had co-led Mobility Group with Maloney, now will be its sole general manager.

• Perlmutter and Maloney have elevated "peer-plus-one" status in Intel's management committee, with Perlmutter responsible for cross-Intel product development and architecture decisions and Maloney responsible for product pricing and positioning.

The change "will speed up our decision-making in these critical areas, while allowing me to spend more time on our key strategic issues," said Otellini in a memo to employees that was seen by CNET News.com.

• Chandrasekher will lead a new business for low-power processors and ultramobile personal computers.

• Kim will replace Don MacDonald as general manager of the Digital Home Group.

• MacDonald will become vice president of corporate brands and marketing, reporting to Maloney.

• Bill Siu, who had been general manager of the Channel Platforms Group, is retiring. A new general manager will be named later, and the group now will be part of Maloney's sales and marketing group.

• Richard Wirt, co-general manager of the Software Solutions Group, is retiring. Renee James will now be the group's sole general manager.

• There are no changes to the Digital Enterprise Group, led by Pat Gelsinger.

CNET News.com's Tom Krazit contributed to this report.