Krzanich: his departure leaves many questions unanswered
(Image credit: Intel Corporation)
Intel chief executive Brian Krzanich has resigned after it came to light that he had a consensual relationship with an employee, contravening the group's policy of "non-fraternisation". Chief financial officer Robert Swan has taken over as interim CEO. Krzanich resigned even though the affair ended before he became CEO in 2013. Intel shares dipped around 2% $5bn on news of the departure, which has "cast a new spotlight on sexual mores at senior executive levels", says Richard Waters in the Financial Times. Krzanich's failure to disclose the affair it was reported by an anonymous staff member was "another breach of company policy".
The departure leaves "many questions unanswered", says Don Clark in The New York Times. Former employees said Krzanich "exhibited an arrogant personal style and handled staff changes in ways that created enemies", says Clark the #MeToo anti-sexual-harassment movement may also have informed Intel's reaction.
But Krzanich wasn't the first Intel executive to fraternise with subordinates. "A quick look at Intel history shows that this type of fraternisation has happened at high levels in the past", says Dean Takahashi on the VentureBeat website. Moreover, Krzanich has been "the leader of the tech industry when it comes to doing the right thing for diversity and sexual harassment" he has worked hard to improve diversity at Intel and pledged $125m to start-ups run by women ."I expect the board had other reasons [to let Krzanich go] and chose one that reflected the least poorly on Intel," tech industry analyst Rob Enderle tells VentureBeat.com.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
That's probably true, says Iain Thomson on TheRegister. "Inter-office affairs are not uncommon at Intel, even among senior management", an Intel insider tells Thomson. Rather, Krzanich's departure may have to do with "the state Intel finds itself in". Rival AMD is challenging Intel's near-monopoly of the data-centre chip market; rival Nvidia has already cornered the market for artificial intelligence (AI) and graphics chips; Intel suffered embarrassing failures in its "Xeon Phi" supercomputer chip programme; and it has "lost its edge" against rivals TSMC and Samsung in building next-generation "ten nanometer" chips.
With Krzanich gone, Intel has a "golden opportunity", says MarketWatch.com's Ryan Shrout. Intel is an "oddity simultaneously both a clear leader and one struggling to keep up with the competition in new, emerging areas". A new boss with a product and chip architecture background "can help build a new paradigm" and provide the "resources, funding and engineering" for AI one of the most promising new areas that will ensure it doesn't "fall permanently behind Nvidia". Intel must transform into "a new company prepared to take on these challenges".
Countrywide hit by property slowdown
Countrywide, the UK's biggest chain of estate agents, with more than 850 branches under brands such as Bairstow Eves, Hamptons and Gascoigne-Pees, saw its share price slide by almost 30% in a single day this week, as it announced that profits would be £20m lower than last year and that it would need to raise more money from investors to reduce borrowing. It was the group's fourth profit warning in eight months.
Much of the problem can be laid at the feet of former chief executive Alison Platt, who just "didn't seem to get it", says Jim Armitage in the Evening Standard. Under Platt, Countrywide lost "swathes of experienced agents and executives". After telling all of the estate-agency divisions' managing directors that they faced the threat of redundancy, she decided the company should be "remodelled as a retailer", leaving staff "utterly baffled". Unsurprisingly, says Armitage, the plan didn't work.
New CEO Peter Long announced a "back to basics" recovery plan in March, reports Julia Kollewe in The Guardian, cutting 150 jobs, and pleading with senior staff who had left under Platt's regime to return.
Yet Countrywide's troubles are not merely down to poor strategy they are also symptomatic of a wider UK property slowdown, centred on London. London-focused estate agent Foxtons has also reported a fall in profits, says Sebastian McCarthy in City AM, while Berkeley Group, which builds upmarket houses in the capital, recently said that its profits had "peaked". Meanwhile, housebuilder Crest Nicholson is planning to leave the "overheated" London property market.
City talk
Infrastructure group Stobart has called an extraordinary general meeting for next month, says Matthew Vincent in the Financial Times. Stobart wants shareholders to vote against a resolution from ex-director Andrew Tinkler (who owns 7.7% of the group) to remove chairman Iain Ferguson and replace him with retail entrepreneur Philip Day. Stobart fired Tinkler earlier this monthand is suing him, alleging "breach of contract and fiduciary duty". Tinkler, meanwhile, "has launched defamation proceedings" against the board. Invesco Asset Management, which owns a 25% stake, isbacking Ferguson, but Neil Woodford, who owns a 20% stake, backs Tinkler.
UK supermarkets have enjoyed more than two years of sustained growth, reports market researcher Kantar Worldpanel, with one notable exception, says James Moore in The Independent Sainsbury's. Sales fell by 0.2% and market share from 16% to 15.6%. Chief executive Mike Coupe (pictured) has the supermarket in a "holding pattern" pending the competition authority's look at its merger with Asda.Yet the deal could turn sour unless he can stop what's "starting to look like rot". Coupe can "certainly forget singing his favourite ditty We're in the Money in front of any TV cameras".
Staff in wealth manager Quilter, which was spun out of financial services giant Old Mutual, were sitting pretty as the company debuted on the stockmarket this week. All staff were given £2,000-worth of shares, report Lucy Burton and Jack Torrance in The Daily Telegraph, which rose by 9% in the first day of trading. "Breaking up is hard to do. But in our case, it was the right thing," said Quilter's CEO, Paul Feeney.
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Ben studied modern languages at London University's Queen Mary College. After dabbling unhappily in local government finance for a while, he went to work for The Scotsman newspaper in Edinburgh. The launch of the paper's website, scotsman.com, in the early years of the dotcom craze, saw Ben move online to manage the Business and Motors channels before becoming deputy editor with responsibility for all aspects of online production for The Scotsman, Scotland on Sunday and the Edinburgh Evening News websites, along with the papers' Edinburgh Festivals website.
Ben joined MoneyWeek as website editor in 2008, just as the Great Financial Crisis was brewing. He has written extensively for the website and magazine, with a particular emphasis on alternative finance and fintech, including blockchain and bitcoin.
As an early adopter of bitcoin, Ben bought when the price was under $200, but went on to spend it all on foolish fripperies.
Review: Eden Roc Cap Cana – fun, sun and golf in the Caribbean
Reeves delays cash ISA reform, but savers are not out of the woods yet
