Update: Intel reshuffles senior execs

A day after posting its second quarter of weak earnings, chip-making giant Intel Corp. announced Thursday it would shuffle top managers to new positions.

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The strategy inserts Sean Maloney as the new leader of sales and marketing, replacing co-general managers Eric Kim and Anand Chandrasekher. Maloney had been co-manager of the mobility group.

Kim will now manage the digital home group, pushing Don MacDonald into a new position as vice president of corporate brands and marketing.

Chandrasekher will take over a new Intel division that includes low-power processors and ultramobile PCs, such as the "Origami" product launched with Microsoft Corp. and Samsung Electronics America Inc.

In a market where Intel has cut costs on its chips to keep up with hard-charging rival Advanced Micro Devices Inc., these changes were overdue, analysts said.

"People who have been at the company awhile knew that there was duplication in departments, and they were not as lean and mean as they could be. This was not a surprise so much as recognition," said Rick Doherty, an analyst with The Envisioneering Group. "Undoubtedly, this will help."

The moves are part of a corporate reorganization promised by Chief Executive Officer Paul Otellini after the company reported a slump in first-quarter earnings, said Intel spokesman Robert Manetta.

"Paul announced in April we would be looking at all aspects of the business to improve our efficiency and decision making, and two-in-a-box is one thing we'll be looking at," Manetta said.

Under its two-in-a-box management strategy, Intel assigns two executives to lead each division.

According to the changes, Intel will shrink that format to a single leader of the mobility and the sales and marketing groups. But the company will maintain the existing pairs of managers in both the technology and manufacturing division and the digital enterprise group.

"By reducing some of the two-in-a-box divisions, we will reduce the number of people reporting to Paul, which frees him up to do more strategic thinking," Manetta said.

Otellini shuffled the managers in an effort to find a better match between their responsibilities and their skills and experience.

"Anand Chandrasekher has a history of running product groups, such as the workstation group and the mobile division that launched the Centrino platform. Now he'll run our group that includes ultramobile PCs and low-power IA (Intel architecture chips). It's a small effort right now but is growing in importance," Manetta said.

Likewise, Kim has more experience with consumer electronics than other senior executives, so Otellini assigned him to the digital home group, which produces products ranging from components in set-top boxes to the Viiv home entertainment platform.

The management shuffle also includes two retirements. William Siu, general manager of the channel platforms group, and Richard Wirt, co-general manager of the software and solutions group, will both retire at the end of 2006.

In other fallout, Renee James will continue as general manager of the software and solutions group, when Wirt retires. David Perlmutter will continue as general manager of the mobility group, without Maloney.