What’s up with… Intel, Meta, Telia

• Intel starts CEO search after Gelsinger’s sudden exit  
• Meta preps around-the-world subsea cable build
• Telia completes its restructuring process

In today’s industry news roundup: Sudden departure of Pat Gelsinger leaves Intel with a large hole to fill; Meta is apparently planning to build a subsea cable that will run around the world and be used only by the big tech firm; Telia has completed its restructuring process at a lower cost than expected; and much more!

Here’s a post-Thanksgiving shocker that few would have seen coming… Intel is looking for a new CEO after the very sudden departure of Pat Gelsinger, who has retired from the chip giant’s board and executive team effective 1 December, the company announced Monday morning. Gelsinger took on the CEO role when he returned to the company in February 2021 but has been under intense pressure during the past year as Intel’s financials faltered and rival Nvidia rose to prominence as the clear leader in the AI chip sector. While the Intel board starts the search for a permanent replacement, Gelsinger’s seat is being kept warm by two interim co-CEOs – CFO David Zinser and Michelle Johnston Holthaus, who has been appointed as CEO of Intel Products, which comprises the vendor’s Client Computing Group (CCG), Data Center and AI Group (DCAI) and Network and Edge Group (NEX). Holthaus was previously general manager of the CCG unit. Frank Yeary, independent chair of Intel’s board, will become interim executive chair during the period of transition, while the leadership structure of Intel Foundry, which is being carved out into a standalone subsidiary, remains unchanged. Gelsinger noted: “Leading Intel has been the honor of my lifetime – this group of people is among the best and the brightest in the business, and I’m honored to call each and every one a colleague. Today is, of course, bittersweet as this company has been my life for the bulk of my working career. I can look back with pride at all that we have accomplished together. It has been a challenging year for all of us as we have made tough but necessary decisions to position Intel for the current market dynamics. I am forever grateful for the many colleagues around the world who I have worked with as part of the Intel family.”  In September, Gelsinger announced a strategic overhaul of the company, only weeks after he announced plans to cut 15,000 jobs to reduce operating costs by $10bn when Intel reported its second-quarter results in early August. Since then Intel has been the subject of much M&A speculation, including talk of a potential takeover bid by Qualcomm (though that plan appears to have been put on ice by the wireless chip company). And then just last week, Intel announced it had secured $7.86bn in Chips Act funding from the US government: Not only is that some way short of the $8.5bn it had been expecting, but the terms of the funding mean that Intel cannot sell a majority stake in its foundry business, as Reuters pointed out. Add all of that together and, it seems, the Intel board needed someone else at the helm, a point that chairman Frank Yeary made clear as he praised Gelsinger. “On behalf of the board, I want to thank Pat for his many years of service and dedication to Intel across a long career in technology leadership… [he] helped launch and revitalize process manufacturing by investing in state-of-the-art semiconductor manufacturing, while working tirelessly to drive innovation throughout the company,” noted Yeary, before adding that “while we have made significant progress in regaining manufacturing competitiveness and building the capabilities to be a world-class foundry, we know that we have much more work to do at the company and are committed to restoring investor confidence,” and that, it seems, involves putting the company’s “product group at the center of all we do” under the leadership of Holthaus. So what do investors feel about the news?  Intel’s share price is up by 3.4% to $23.86 in early trading on the Nasdaq exchange Monday morning.  

Facebook’s parent company Meta is planning the construction of a 40,000kms submarine network cable that would span the world and be used only by the big tech firm’s operations, according to TechCrunch, with details about the multibillion dollar initiative expected to be revealed next year. The idea is that Meta would have total control over an international network that could be dedicated to the data traffic supporting its digital media platforms – Facebook, Instagram and WhatsApp – and also be able to handle the demands of the AI and metaverse application era. The plan was first unveiled by submarine cable sector veteran Sunil Tagare (a founder of Flag Telecom and Project Oxygen), who published a LinkedIn post about Meta’s intention in October. He noted that the cable has been dubbed W (because of the shape of the cable’s intended route around the continents) and that the initial cost of deployment would be around $2bn, with costs in the region of $5bn to $10bn over the next five to ten years (Tagare breaks down his cost analysis in the LinkedIn post). Meta is currently the part-owner of 16 subsea cables, but this would be wholly owned and used by the company, which is plotting a route for the cable that would avoid the most tricky areas for submarine operators: The W cable would avoid “the Red Sea, the South China Sea and more importantly Egypt, Marseilles, the Straits of Malacca and Singapore -- all of [which] are now major single points of failure,” noted Tagare.   

Telia, which has operations in five markets in Scandinavia and the Baltic states, has completed its restructuring process that resulted in a headcount reduction of about 3,000 staff, about 15% of the telco’s total workforce: The job cuts were announced in September, when the operator estimated the cuts would cost it 1.4bn Swedish krona (SEK) ($128m) and result in annual operating cost savings of SEK2.6bn ($237m). With the 3,000 jobs now cut, the operator has confirmed its expected annual cost reductions but notes the charges associated with the cuts are now expected to be slightly lower at SEK1.3bn ($118m). The restructuring process also involved a process to decentralise the company to enable a “new country-led operating model… Effective December 1, each Telia country unit – Sweden, Finland, Norway, Lithuania and Estonia – holds the main responsibility and accountability for commercial planning and execution, meeting customer needs and pursuing growth opportunities. To enable this, capabilities in IT, analytics, products, customer contact and strategy have moved from Telia’s central units to the countries,” the operator noted, while various group functions (group finance, corporate affairs, people & culture, and communications, brand & sustainability) as well as the strategic technology unit (to be headed up by a new CTIO from the end of March 2025) will remain as centralised, shared functions. President and CEO Patrik Hofbauer noted: “We are creating a Telia fit for the future. Millions of people rely on our networks and services every day, so we have many unique strengths on which to build. We have made tough but necessary changes, and our employees’ dedication during this time has been exceptional. Through our new operating model, we can serve customers better, build performance in our teams, and grow in a way that supports investment and attractive shareholder returns.” Hofbauer outlined a revamped strategy, including the company’s ‘value creation plan’ for 2025-27, in September. 

BT Group has renewed its contract to provide mobile services for the UK government’s Emergency Services Network (ESN), which provides front-line workers with priority access to communications services over the telco’s 4G network. The UK national telco has been awarded a new deal worth £1.29bn to provide services for the next seven years: As part of the deal, BT will build “a new dedicated core network for ESN as a mission-critical service,” ensuring priority connectivity to the UK’s emergency services users at all times. Read more.

Still with BT… The Financial Times (subscription required) reports that CEO Allison Kirkby has ordered the UK telco’s staff to work from the office for at least three days per week, a directive that will impact 50,000 of the operator’s employees. According to a memo seen by the newspaper, Kirkby is concerned that current attendance levels are impacting productivity and not helping with her turnaround efforts.   

Test and measurement vendor Keysight Technologies is on track to acquire Spirent Communications during the first half of its fiscal 2025 year, which runs until the end of April next year, the company has announced. Keysight outbid rival Viavi Solutions earlier this year and agreed a £1.16bn cash deal to acquire Spirent. To meet regulatory requirements related to the deal, Keysight is to sell Spirent’s high-speed Ethernet and network security units via an auction process that has already been initiated, with a view to completing the sale of those units at the same as it it completes the acquisition of the bulk of Spirent’s business. The deal has been approved by regulators in the UK, Germany and France (conditional), while the companies continue to engage with China’s State Administration for Market Regulation to obtain clearance for the Acquisition under the country’s Anti-Monopoly Law. 

– The staff, TelecomTV