Intel, pressured by shareholders and a market recession (whether you admit it or not) has decided to cut salaries by 5%… Corporate employees from across the business have confirmed that the company is making drastic cuts, which are affecting the compensation and benefits of its employees. Quarterly salary bonuses, annual bonuses, halving the 401k match from 5% to 2.5%, suspension of raises, and cuts in base salaries are all official, according to internal communications. The cuts are over, largely affecting engineering departments, with leadership cuts of 10% to 15% while CEO Pat Gelsinger is losing 25%.
These fiscal measures are causing concern among employees who would have felt untouchable just a few years ago as they live in a golden age, but with inflation the cuts are deepening. While the company claims these cuts are necessary to reduce its burn rate, the fact that the company’s dividend remains intact raises questions about its priorities. This decision to prioritize dividend over employee retention is not only problematic for employees but also for the long-term future of the company. The loss of bonuses, along with cuts in base pay, can cause a drop in morale. However, these pay cuts, while virtually unheard of in this space, are in stark contrast to the drastic measures taken by Microsoft and Google.
In October 2022, Intel announced a comprehensive supply chain review aimed at cutting costs. Since then, the company has taken drastic global actions, such as cutting an R&D center in Israel, laying off thousands of employees, cutting its RISC-V accelerator program (which it probably needs more than anything else). , dropping the vertices of the network infrastructure, and cutting new ones. Even after these cuts, Intel will remain cash flow negative through 2023, according to the source of the expense story.
Source: Semi-analysis
