Intel Cuts Jobs in Marketing Ahead of New CMO's Arrival

Intel Corp is shedding jobs in its marketing department ahead of the arrival of new chief marketing officer Steven Fund, who the struggling chipmaker is betting will restore some shine to its brand.

In recent weeks, close to 40 marketing employees have accepted voluntary incentive packages to leave, said two people close to the company who were not authorized to comment.

Marketing vice presidents Kevin Sellers and Nancy Bhagat, who would have reported to Fund, are also leaving the chipmaker, the two sources said.

The reductions come as the world's largest chipmaker struggles to revitalize a brand associated with a crumbling PC market. CEO Brian Krzanich said during an online Reddit discussion in February that Intel needed to revamp its marketing to get back some of its "coolness."

Morale among many on the marketing team is at an "all-time low" and contributed to some employees' decisions to leave, one of the sources told Reuters. The chipmaker's marketing department has struggled over the past year or two to captivate consumers with new ultrathin laptops and two-in-one tablets.

"We all know there's a problem. If you look at the Interbrand numbers you can see it," said a third person familiar with Intel's marketing department. "It was smart to go external, bring in someone with fresh thinking."

Intel spokesman Chuck Mulloy declined to confirm how many people had left, but he said they fall within a previously announced plan to trim the chipmaker's workforce by 5 percent this year.

But he said they were not leaving as a reaction to specific problems in the marketing department.

Intel's marketing department had more than 300 employees spread around different business units and offices prior to the cuts, one of the sources estimated.

Brand erosion
Last week, Intel announced it had hired senior Staples executive Fund as its new chief marketing officer, and that he would report directly to Krzanich when he starts in June. He replaces 27-year Intel veteran Deborah Conrad, who left in March.

Launched in 1991, the chipmaker's "Intel Inside" campaign turned commodity electronic components into premium products, and its stickers eventually became ubiquitous on laptops.

But Intel's brand has lost a little of its glitter in recent years. In 2013, Intel was No. 9 on consulting firm Interbrand's global ranking, down from No. 7 in 2011.

Marketing employees have been split over Krzanich's decision to hire a new marketing chief from outside the company, unusual for the culturally insular chipmaker.

Fund has helped build brands at Procter & Gamble and at Pepsi-Cola. Some Intel staff questioned his lack of technology experience while others at the company said they looked forward to working with him.

© Thomson Reuters 2014