CEO, Brian Krzanich, has been outed from the company after violating the company’s non-fraternization policy.
The CEO, 58, had a “consensual relationship” with an employee which resulted in him losing his job as CEO as well as leaving the company’s board.
In his place, Chief Financial Officer, Robert Swan, has stepped in to be interim CEO with his new role effective immediately. Intel is now searching for a permanent CEO to take his place.
The company made the announcement on Thursday after conducting an investigation into the relationship.
“An ongoing investigation by internal and external counsel has confirmed a violation of Intel’s non-fraternization policy, which applies to all managers,” the company stated.
“Given the expectation that all employees will respect Intel’s values and adhere to the company’s code of conduct, the Board has accepted Mr. Krzanich’s resignation,” the statement continued.
Intel has a strict policy that does not allow managers to have relationships with people who report to them directly or indirectly.
According to people familiar with the relationship, who spoke to CNBC, the relationship had taken place “some time back” but it is has not been said who the person he had a relationship with is.
The people said it was only recently that the company had become aware of the relationship which prompted the investigation and the CEO then being asked to resign.
“The Board believes strongly in Intel’s strategy and we are confident in Bob Swan’s ability to lead the company as we conduct a robust search for our next CEO,” Intel Chairman Andy Bryant said.
He added, “Bob has been instrumental to the development and execution of Intel’s strategy, and we know the company will continue to smoothly execute. We appreciate Brian’s many contributions to Intel.”
Since Krzanich has been CEO of the company, Intel shares have gained roughly 120%.
Eric Jhonsa from TheStreet remarked that the company’s next CEO would “likely do well to try to strengthen the chip giant’s hand in two areas, manufacturing technology and PC CPUs, where it has seen historical leads wither and openings created for AMD (AMD – Get Report) and other rivals.”
The company also announced this week that it has increased its guidance for the second quarter. Previously Intel had forecast adjusted earnings of 85 cents a share with revenue of $16.3 billion. The new forecast is for adjusted earnings of 99 cents per share on $16.9 billion in revenue.