Intel Corp. ExecutivesShady or even Criminal Behavior

We have covered the massive age discrimination practices that resulted in forced retirements and massive layoffs of older Intel Corp. employees in 2015, 2016 and beyond. When I talk face-to-face with members of PDX-TIE.ORG or other ex-Intel employees (less frequently, due to COVID-19) I am surprised about their ignorance regarding the fact that the company is faced with so many very significant lawsuits due to various shady and perhaps criminal behavior of its senior executives and the board of directors.

From my own perspective, the 2015/2016 layoffs were the event that "broke the camel's back" and proliferated the seeds of corruption and mistrust between Intel Corp. Executive management and the remainder of employees workforce.

While the "Executive Class" at Intel Corporation looked at their bonuses and the stock market evaluation of the company as their main goal, they lost their "moral compass" to unproductive finger-pointing, coverup and greed. Make no mistake, technological challenges always abound in the engineering world. This is why people who pursue engineering as a career, typically belong to "problem Solver" personality class. The main challenge for true engineers (not "engineers" in title or even by university degree) is to get their managers to overcome their "risk aversion" and "cover your ass" attitude. Technology may be challenged by rules of physics; however, management and particularly Executive Management is challenged by human behavioral factors that are essentially all "man-made".

The old "Intel Culture" defined the path for coexistence between both "risk taking" (as in venturing to achieve extremely high goals) and "risk management" (challenging the validity of ideas based on data or provable facts through the "constructive confrontation", rules of debate). These principles were the core values of the company and enabled its workforce to great achievements, through "thick and thin", while facing both technological challenges as well as tough competition in the Semiconductor market segment.

The great principles of "Intel Culture" were eroded, slowly but surely, over a long period of time,after Andrew Grove was replaced as CEO of the company by a series of successors.

The worst Intel Corp. CEO without a doubt was Brian Krzanich (BK), who did not only violate the basic principles of "Intel Culture", but actually made a great effort to overrule and wipe it out in his zeal to receive his Executive Bonuses. It is ironic that BK was forced to resign his post as CEO, due to blatant violation of the the Employee Handbook--the same operational handbook that spelled the rules of "Intel Culture".(see: https://www.pdx-tie.org/2018/06/mf-intel-ceo-resignation-raises-more.html)

The major side effect of getting rid of experienced (and older) employees, who grew up on principles known as "Intel Culture" (attributed to ex-CEO Andrew Grove), was the erosion of the company founders values. "Intel Culture" promoted transparency and discipline from employees at all levels, including the Executives level of offices up to the CEO level.

The sudden disappearance (due to forced "early retirement" and massive layoffs) of older employees (who themselves grew up on "Intel Culture"), left  the younger generations of Intel Corp. employees, who replaced the "old timers", having to learn their way around the various company operations, on their own.

The Intel Corp. Executive Class was so detached from reality that they believed in younger replacement employees' ability to ramp-up on-their own, without the benefit of experienced employees, being around to consult and guide the newcomers (in Intel speak the "NEOs"). Apparently, these executives believed that product design engineers and Fab workers can perform their job by watching YouTube videos and sharing messages through Twitter or Facebook.

 

Over the last five years, we have seen plenty of evidence to the aftermath that was left following the 2015/2016 layoffs, as the "transparency" "Open Door" "problem ownership" and "constructive confrontation" elements of Grove's "Intel Culture" were replaced by coverup and severe suppression of facts, in addition to the fabrication of "fake news, public relations campaigns" designed to keep both company employees and stock holders, at bay.

Unfortunately, there are too many similarities of Executive Class behaviors in corporate America that are created by people whose self-interest and greed, end up working against the company's long-term interests as well as the company employees best interests.

The Boeing B737MAX program fiasco, has so many parallels to the Intel story, in terms of Corporate Executives forcing their way on their underlings by decree and without listening to employees feedback. Between the Boeing case and the Intel Corp. case there is only one exception: thus far (as far as we know) Intel Corp. actions did not result in the loss of human lives.

Currently, there are  a number of legal processes undergoing against Intel Corp., which allegedly, involve anything, from mismanagement of the old employee pension fund (that was in effect until 2009), to long-term coverup of functional "bugs" that are "featured" into the Intel chips "Architecture", to making false statement to stock holders and potential stock holders of INTC equities.

The most significant decision of the Supreme Court of the United States (SCOTUS) to allow the law suite against Intel Corp. "old pension fund", originally filed in 2015 by former Intel engineer Christopher Sulyma, to proceed without delays. This should be the talk of the day. For some reason, this law suit is not getting much attention in the press.

 

Since the Sulyma Employee Retirement Income Security Act (ERISA) legal case reached the SCOTUS level of jurisdiction, it is easy to understand that Intel Corp. legal defense strategy is and has always been, based on eroding the resolve of individual plaintiffs, by resorting to legal maneuvering, stalling, and outright lying.

I believe that every current or ex-employee of Intel Corporation, as well as current or past investors of INTC shares, should follow-up on these articles:

• U.S. Supreme Court allows retirement plan lawsuit against Intel
•  Class Action Lawsuit Has Been Filed Against Intel Corporation and Encourages Investors to Contact the Firm
•  Intel Corporation Class Action Lawsuit
• Securities Class Action Lawsuit has been Filed Against Intel Corporation 

All the best,

 --Dr.Flywheel

Intel Corp.The “Headless Chicken” Syndrome

We have a good reason to believe that Brian Krzanich (BK) resignation from Intel Corp. was a “Roger Stone” style diversionary PR stunt, chosen by the Intel Board of Directors to protect the stock price from negative effect of vacating the top executive position. While supposedly, BK resigned his position as CEO due to ethical violation of company rules, in reality, BK was responsible for significant blunders that kept sinking the company position as a leader of the semiconductor manufacturing business.

The fact that Intel has not filled the CEO position since June 2018, indicates one or more of these points:

1. No reasonable candidate is willing stick their head in the mess that is left behind BK’s legacy.
2. The Board of Directors is complicit in letting BK run the company unchecked for such a long time and any well qualified candidate who interviewed with the board, figured out that they will be working against the tide and without backup.
3. The Board of Directors is aware that CEO replacement will not solve the problems that Intel Corp. is facing, because the problems are much more profound and involve general lack of trust within the organization. Consequently, they are only focusing on damage control and can live with an interim CEO who is “absolved” of long-term responsibilities.
4. The U.S. economy is currently running in full swing. The Board of Directors is focusing on “making hay while the Sun is shining”. A new CEO, particularly one who comes from the “outside” may come up with demands for radical changes to the internal organizations and consequently put the current stock price at risk. It is likely that the Board prefers to maintain the status quo over any "revolutionary" actions.

Brian Krazanich replaced the late Paul Otellini as Intel Corp. CEO in May 2013. Although presenting himself as an “engineer” in practice, BK had a very short engineering experience and very quickly, after being hired as a “process engineer” (a manufacturing position) at the New Mexico Fab, he shifted to a management track, where the rest of his career at Intel Corp. was spent. Most of BK career growth took place as a manager at the Technology and Manufacturing Group (TMG), which operates the silicon manufacturing lines (known as the "Fabs"). BK had no background in circuit design, electrical engineering, systems engineering, or software engineering which together, create the actual IP value of today's computer systems products.

For many decades since its foundation, Intel Corp. held itself to high standards of transparency by keeping low overhead and sharing information with all of its employees. As part of this exercise of transparency, the company annually conducted an employee feedback study known as the Organization Health Survey (OHS). The OHS presented employees with a large number of questions, asking them to grade the company performance over a wide range of issues. The OHS goal was to give managers a realistic assessment of the efficacy of management practices. The results of the OHS were published and distributed to employees, as a matter of course, followed by a public discussion of the issues exposed by the annual OHS. As the late Paul Otellini used to say "OHS goal is to keep Intel Corp. management in tune with company employees".

In 2013 (the first year in which BK was the CEO), Intel Corp. "C-Suite" issued a message to employees that the pending, annual OHS will not be conducted for that year. This was supposedly, because BK was in his position for less than a full year. This was the first time that the OHS was not run, since inception of the practice at Intel Corp.

In 2014, though the OHS questioner was distributed to employees on time, executive management refused to publish the OHS results for the first time in the history of the company. The only points that were exposed, came out of the personal blog that Richard Taylor (head of Intel HR at at the time) published on Planet Blue, the internal employee social network. The major issues mentioned on that blog included the fact that the OHS revealed significant trust issues among corporate entities, as well as lack of trust between managers and technical leaders, serving within the same business units.

Since Richard Taylor’s blog was open to all employees, his comments about the OHS received a flood of comments and questions. Like other company employees, I contributed a few of these comments at the time. My comments specifically addressed the growing lack of knowledge and many times complete ignorance of significant technical issues on the part of company managers at all levels. I also mentioned the systemic diminishing of the authority bestowed upon technical leaders and the overt effort to cut their numbers in company ranks, while staffing a growing number of manager positions. At the time, we did not know that BK and his cronies were planning to lay off a large number of employees in 2015; however, in retrospective, it becomes clear that the ground work was already set for this action to happen.

Interestingly, the 2015 mass layoffs were heavily skewed to exclude managers, compared to employees in individual contributor positions. This fact is clearly demonstrated by the OWBPA report filed by Intel Corp. in June of 2015.

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2014 was the year in which during the course of my work as the systems architect of the Electrical Validation department, I had first row view of the 14nm process yield failures. Upon closer look and a thorough investigation I came to the conclusion that the systems used for engineering audit of the wafers coming out of the Fabs were ineffective for determining a cause-effect correlation. Establishing such correlation is a fundamental requirement for effective failure analysis and subsequent correction of mass manufacturing production flaws. While 20^th Century methodologies were sufficient to monitor silicon defects and determine corrective actions for fixing silicon production flaws for many generations of Intel silicon products, it became apparent that these methods have reach their limit at the time that the last 22nm fabrication process (Haswell family of CPUs) was used at the Fabs.

Looking at the vast amounts of data coming out of the production monitoring systems, I was astonished to find out that no-one on the engineering side of the company, knew how to effectively use the collected data for proper analysis as well as how to apply the analysis towards fixing outstanding yield problems. Further, it was shocking to find out that most of the petabytes (millions of gigabytes) of data was never seriously examined or utilized. In fact, most of the collected data was  unfit and useless for engineering analysis. After years of inertia this revelation was the first indication of a systemic failure. A Laissez-faire approach to running a critical part of the business suddenly falling into obsolescence, mostly due to lack of scrutiny and common sense among managers.

In an effort to correct the situation I began working on an initiative to revise the procedures and the methodologies used for identification of root-causes in silicon wafer failures for the 14nm and the upcoming 10nm fabrication processes. In concerted cooperation with other engineering leaders I devised 21^st Century methodology, specifically using “big data” and artificial intelligence techniques for collection, organization, and analysis of silicon wafer failure handling. The foundation for this framework became internally known as the INTELligence Initiative.

While it took a significant amount of time to educate and convince people that the methodology change is critical for success, a significant number of technical leaders within the engineering organizations at Intel Corp. became convinced that the new direction that I proposed is the right way to go. Further prototyping and application of the methodology were applied to real-life data demonstrating significant success. The only objections, came from high level managers, who had no technical background and were risk averse. The message that I received at the time was “go ahead and implement your solution, if you are successful, we will support you...”.

The INTELligence Initiative and all the process improvements that I was leading at the time, went on the chopping block after the 2015 mass layoffs. C-Suite executives enjoyed their bonuses at the end of 2015 and the orchestra continued to play while the boat was sinking.

Though my immersion in the analysis of the 14nm production problems allowed me to understand the depth of trouble that hat the company was in, I was still convinced that commonsense would prevail and the new methodology would be adopted to help the recovery process. Now, four years later, I see that the common sense never floated to the top, because the Intel Corp. organization became increasingly dysfunctional, year after year.

It is now the end of 2018, BK is no longer the CEO, many thousands of experienced Intel Corp. employees had been permanently laid off in 2015 and 2016 and most of them do not wish to ever return to employment with Intel Crop.

Let us do a reality check as of end of October 2018:

• BK received the dubious credential of being the “First Intel Corp. CEO to Break Moore’s Law”, an attribute that he certainly worked hard to earn...
• BK appointed more Vice Presidents during his tenure as CEO, than any one of his predecessors. The question remains open: "What does the company have to show for this generosity?"
• Intel Corp. has trouble finding competent people who are willing to work for the company, due to its diminished reputation as a fair employer.
• The employee trust issues that were revealed in the 2014 OHS have never been attended to and the employee scare tactics, subsequently employed by BK for more than four years, further eroded chances of repair.
• Intel Corp. sustained tremendous production yield problems with its 14nm silicon production processes while other semiconductor manufacturers, including Global Foundries, TSMC and Samsung proceed to offer reliable 14nm, 12nm 10nm and 7nm products.
• Intel lost its place as the number one semiconductor manufacturer in the world, more than likely, forever.
• AMD business success due to its reliance on external Fabs is capitalizing on Intel Corp. failure to lead in manufacturing technologies and product intellectual property development.
• While still fighting yield problems with the so called “mature” 14nm process current industry news give the impression that the 10nm silicon manufacturing process will never see the light of day, due to both technical and economical factors.
• Apparently the pressure on the limping 14nm production process is so bad that Intel Corp. is moving the system integration “Chip-set” parts back into the older 22nm production line.
• Intel Corp. began selling assets, to offset losses. The latest such action is apparently, the sell off of the memory business, back to Micron Technology, for $1.5 billion

My analysis is that Intel Corp. is facing a plethora of technical problems that are real. However, the overwhelming problem for the company is the presence of incompetent management at all levels, in addition to lack of trust and cooperation inside business units and absence of leadership direction. The current production yield problems are only a symptom of the underlying organizational weakness and lack of leadership resolve. I define this phenomenon as the “headless chicken syndrome”.

--Dr. Flywheel

MF Intel CEO Resignation Raises More Questions

Recent news regarding about Intel Corp. CEO Brian Krzanich informed the public that BK resigned from his position, voluntarily. In view of of the company's record while under the tenure of BK, we believe that this "surprise" resignation was due to multiple factors and was a lot more predictable than not. The "fraternization" charges seem to be a PR solution that was devised to cover up for much more material misdeeds on the part of the beleaguered CEO.The swift way in which the event was announced and executed, indicates that Intel Corp. is doing its best to put maximum distance between BK and the company, more than likely because more serious revelation are about to see the light of day, very soon.

• So far we know that multiple law suits have been filed against Intel Corp. as consequence of the multiple security flaws, found inside Intel's advanced microprocessor architecture that have been discovered by outside security experts. These law suits will have potentially detrimental effect on the company's revenue stream.
• We know that the Federal Government is actively investigating Intel Corp. for illegal workforce manipulation and age discrimination charges. According to our sources, this investigation has been significantly expanded in recent months. The results of this investigation, which is already more than two and a half years along the way, are bound to be significant, both in terms of company image and monetary cost.
• BK himself is facing investigation regarding his sale of millions worth of his stock options, while having first class access to propriety information, regrading the severity of security flaws in Intel Corp. microprocessor architecture and while being able to fully assess the corresponding risks to the company stock valuation.
• The company's announcement that its 10nm manufacturing will not bear fruit until later in 2019, serves as a clear indication that something is awfully wrong with with the way that the company operates. Industry veterans, including myself, assess that the execution problems are not purely technical in nature, but rather have lot to do with chaos within the ranks, due to absence of leadership and expertise. Intel Corp. lost many highly experienced employees due to laying off about 1200 employees in 2015 and 12,000 in 2016, besides forcing thousands of veteran employees to retire. Apparently, the payroll savings in prior years are now costing a fortune in reduced productivity and chaos within the company ranks. To be fair, Intel Corp. annual reports, published over the last few years, stated the risks that such layoffs might bring about; however, management under the leadership of BK decided to take the risk, nevertheless!

It seems like the issue of fraternization, could have been handled with finesse, should BK's functional value in the eyes of the Board of Directors, was in order. The Intel Corp. PR machine could have come with subtle declarations and very little fanfare (like announcing a transition period for the CEO). Such was the case in the past when company executives were involved in quandary of various sorts. Typically, they were put to pasture (or sent to Siberia...) for a few months before quitting their job. Switching titles between President, President Emeritus, and CEO, was also common tactic to contain such moves. However, BK, more than any other Intel CEO before him, positioned himself at the center of a large number of PR campaigns and public personal appearances, in a self-promoting campaign that could only be described as a Trumpian Parade. Apparently, seeking the lime light came home to roost, when the Board finally decided to cut their losses with BK. Undoubtedly, the resignation came as a result of the mounting public scrutiny regarding company performance and dismal growth predictions, relative to the position of Intel's industry competitors. For the Board this is a matter of facts speaking for themselves and not of a sudden puritan morality campaign.

In spite of admitting to the shortsightedness and the missed opportunities in the smart phone ("mobile") market, switching to other sources of revenue to replace the PC market derived income, the company execution remained very slow. Instead of demonstrating true leadership by example, BK elected to run the company as a dictator, eject many of his coworkers whom he viewed as competitors and laid off tens of thousands of experienced employees from the company. Through the course of this process BK demolished the internal, productivity culture that was known until then as "Intel Culture".

Generally, Intel Corp. under the leadership of BK traveled through a process of organizational collapse ever since BK became CEO in 2013. The latest revelations about production line failures and inability to deliver 10nm high volume products, is a symptom of such organizational collapse. Intel Corp. rapidly lost it position as the world's leading semiconductor manufacturer to Samsung and its fledgling merchant Fab business never took off in a substantial way.

BK demonstrated significant lack of trust in in the company's human capital, particularly veteran company employees, a fact that is proven by the following points:

• In his first year as CEO, BK blocked the publishing of the annual Organizational Health Survey (OHS), a survey in which employees provided their feedback about declared organizational goals and related management actions. This blocking of material information from employees, raised a lot of discontent among the rank and file within the company, since such a move has never happened before and clearly demonstrates a lack of transparency. BK never provided employees with an acceptable answer for his move.
• BK drove the company to layoff tens of thousands of veteran employees and forced additional thousands of experienced employees to retire. No attempt was done to invest in employee retraining or reassignment. At the same time that Intel Corp. laid off a massive number of employees, the company also recruited an equal number of inexperienced new employees with foreign citizenship, many of them through H1B visa sponsorship and F1 to OPT conversions. This resulted in vacuum within the ranks, due to shortage of experienced leadership and a complete decimation of the "Intel Culture", a culture of taking responsibility, effective problem solving and operating with open communication and mutual trust. Newcomers, many of them recently arriving from countries that are not compatible with "Intel Culture", had no means to learn and follow by example, because the ranks were void of the older and experienced employees.
• Due to his perceived notion about difficulties in managing the lower ranks, BK elected to invest tens of billions of dollars, into purchasing two outside companies, Altera and MobilEye for ridiculously overpriced valuations. The jury is yet to decide if these purchases were justified in any way; however, through this approach, BK's disdain to take charge and lead his own employees became apparent.
• In 2015, BK declared the 1200 employees who were laid off by the company as "Lowest Performers". He did this in an open forum of employees, which created an enormous uproar inside the company. No attempt was made to correct the statement or apologize to the employees. Instead, Intel Corp. banned these employees from being rehired for their lifetime.
• While trying his best to inflate his PR image, BK painted himself as a champion of female participation in the workforce. In January 2015 he announced that the company will spend $300 million on a new “diversity in technology” initiative. He also appointed his alleged girlfriend Danielle Brown, who was once his "technical Assistant" as the company "Chief Diversity Officer", a position that did not exist until then. Suspicious graft? You decide. Interestingly enough, the 1200 employees who were laid off in July 2015, received along with their "pink slip" a message from CEO BK, declaring that their layoff was called for due to the need to save $300 million, supposedly due to forecast of flat revenue. So it seems like BK was determined to promote his PR agenda by arbitrarily laying off veteran employees, and replace them with "diversity candidates". This would have been perhaps acceptable, besides that many of the women hired were foreign citizen spouses of H1B visa holder workers who stayed in the U.S. under H4 visas. So much to serving equality in diversification. According to the Economic Time of India: More than 90% of such spouses are Indians. According to a recent report of the Migration Policy Institute, the US has issued EADs to more than 71,000 spouses of H1B visa holders, as of early 2017.

Workforce manipulation shenanigans and publicity stunts for hiding self serving nefarious agenda will remain the characteristics of Brian Krzanich career at Intel Corp., as well as his unique legacy of being the first Intel CEO to break Moor's Law. Though BK PR blurbs attempt to present the person as an "engineer" who runs a large technology company, people that knew BK at the beginning of his Intel career, told me that Brian had a very short stint in chemical engineering at the Albuquerque Fab, after which he immediately became a manager. Most of his time at Intel, BK spent at promoting his career, managing people and organizations and NOT doing actual "engineering" work. This could explain, at least in part, why real engineering and organizational problems are plaguing Intel Corp. as of late, since the CEO was probably not being able to understand what was broken in the system and what was necessary to fix it, while his personality prevented him from seeking good advice from either inside or outside the company.

--Dr. Flywheel

References:

• Intel Faces Age-Discrimination Claims
• The Federal Government is Investigating Intel Corp. for Age Discrimination Violations
• The One Man Who Could Save Intel
• Intel hit with 32 lawsuits over security flaws
• Intel CEO Brian Krzanich Investigated By Block & Leviton LLP For Securities Fraud - CEO Sold $39 Million In Intel Stock Before Telling The Public About Major Flaws In Intel Processors

Does Intel Corp. PR Hype Truly Compensate For These Facts?

Under the leadersheep (...!) of Intel Corp. CEO Brian Krzanich, the number of PR conferences and press releases tripled or even quadrupled, compared to the number of same events under all of his predecessors. Although INTC stock has crossed the $50 mark in recent days, the question still remains, whether this stock price is truly based on fact, or perhaps the price inflation is just an artifact of the disproportionately overblown stock market bubble.

The jury is still out; however an interesting article in EE Times entitled:

Intel Needs New Strategies, ASAP

provides very significant facts, adding into the picture necessary to understand the reality of Intel Corp. business growth potential and its long term standing as a player in the highly competitive semiconductor market.

Read the full EE Times article, written by Sang-Yun Lee at this link:
https://www.eetimes.com/author.asp?section_id=36&doc_id=1333043&print=yes

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All the best!

--Dr.Flywheel