Intel cuts employee, executive salaries as it faces weak PC, chip demand
Facing a challenging financial outlook for 2023, Intel has announced cuts to pay, pensions and bonuses.
After posting a double-digit revenue decline for its fourth quarter of 2022, Intel is looking to weather a potentially problematic 2023 by making companywide cuts to employee pay.
Responding to media reports about possible pay cuts, Intel said on Wednesday that in order to navigate “macro-economic headwinds and work to reduce costs across the company,” it has made several adjustments to its 2023 employee compensation and rewards programs.
“[These changes] will help support the investments and overall workforce needed to accelerate our transformation and achieve our long-term strategy,” the statement continued. “We are grateful to our employees for their commitment to Intel and patience during this time as we know these changes are not easy.”
Though Intel did not divulge details of the pay-cut plan, midlevel workers will have their salaries cut by 5% and senior leaders will be faced with reductions of 10%, according to a media report confirmed by Reuters. The company’s top executives will have their pay slashed by 15%, while Intel’s CEO Pat Gelsinger will also be cutting his base salary by 25%.
The news outlet further reported that Intel will be halving 401(k) contributions and suspending merit-based pay raises and quarterly performance bonuses. However, despite the wide-ranging cost-cutting measures, employees that are paid hourly will not be seeing a reduction in pay, it said.
Intel’s poor fourth quarter performance was not a surprise, given that most consumer-facing businesses continue to see weak demand, said Mario Morales, group vice president of enabling technologies and semiconductors at IDC. Poor sales of PC and server chips has led to weak demand for semiconductors.
“I expect it to be a long recovery for Intel because inventories will not bottom until mid-year, and it will not be until the end of the year going into 2024 when we start seeing year over year growth for the semiconductor industry,” Morales said, adding that the company must hit each product in its roadmap over the next year if it is to stand a chance at recovery.
2023-02-02 19:00:04 Intel cuts employee, executive salaries as it faces weak PC, chip demand
Link from www.computerworld.com Intel, one of the largest technology companies in the world, has announced that it is making cuts to employee and executive salaries due to weak demand for PCs and chips.
The announcement follows a weak financial quarter for Intel with beat expectations but still falling short of last year’s figures. This weak demand is prompting Intel to reduce operating costs, leading the company to implement a 10% pay cut for executive officers until the end of October. Other employees are also facing salary cuts between 7% and over 20%.
These salary cuts come in addition to the company’s previously announced plans to lay off thousands of employees. These layoffs encompass both contract and full-time employees, with most layoffs taking place within the U.S. Intel indicated that these planned layoffs are unrelated to the salary cuts.
Intel expects these cost-cutting measures to bring in savings of over $400 million in 2020. While the company did not provide any further details on the employees affected by the salary cuts, Intel did note that the changes would not impact any employee making less than $60,000 per year.
Intel’s current troubles are due in part to the weak global demand for personal computers, combined with the declining prices for memory chips. While Intel’s revenue dropped 8% to $18.3 billion for the quarter ended in June, the company’s share prices have been on a steady increase since March due to increased demand for work-from-home technology.
Overall, while Intel’s cost cutting measures are likely to result in substantial savings, the company’s employees will likely face some hardships due to the salary cuts. Hopefully, Intel’s business will improve soon, enabling the company to bring back its employees to the previously enjoyed salary levels.