According to recent reports, Intel intends to reduce the basic income of CEO Pat Gelsinger by 25 percent, while the wages of the other members of his executive leadership team
would drop by 15 percent.
Because of this decision, it is anticipated that there will be no widespread layoffs in 2023.
It has been stated that Intel will be decreasing the compensation of its employees, and the company believes that this latest action will prevent layoffs from occurring.
In the technology sector, widespread employee terminations have taken place over the
course of the past half year.
Apple is the only large company that has, up to this point, been successful in avoiding the
practise of laying off staff in order to reduce expenses. The majority of the major
technology businesses have taken this measure.
Intel reduces the pay of its CEO and managers in an effort to conserve cash
According to reports, in order to avoid taking drastic measures to downsize the staff, the
corporation did slash the compensation of CEO Tim Cook by forty percent.
It would appear that Intel is heading in the same path at this time, however employees at all levels will be harmed by this decision.
Intel Corporation, which is coping with a quick drop in sales and profitability, is slashing
management compensation across the corporation to cope with an uncertain economy and to preserve cash for an ambitious recovery plan. The company has been grappling with a
rapid decline in revenue and earnings.
The chipmaker announced on Tuesday that Chief Executive Officer Pat Gelsinger will be
taking a reduction of 25% to his base salary.
It has been decided that the compensation packages for his executive leadership team will be reduced by 15%.
The senior managers will take a decrease of 10%, while the mid-level managers will receive a reduction of 5%.
At approximately 9:40 in the morning in New York, the price of the stock fell by 0.6%,
reaching $28.10.
The price of the shares dropped by roughly half in the past year.
According to a statement sent to Bloomberg by Intel, the tech giant intends to reduce the
base income of CEO Pat Gelsinger by 25 percent, while the wages of the other members of his executive leadership team will decrease by 15 percent.
The salaries of senior managers will be cut by ten percent, while the salaries of middle-level managers who get pay will be cut by five percent.
Intel reduces salaries and bonuses following poor quarterly results
The change that Intel is considering could demoralise many people, yet it might be
necessary to prevent widespread layoffs.
Intel has taken a different method in order to prevent the loss of thousands of jobs, which has been reported by several other firms as a cost-cutting measure.
According to the information provided to Bloomberg by the company, the chip manufacturer is making preparations for the impending economic downturn and saving funds for future plans.
There is no information regarding whether the salary cut will continue to be in effect until
the end of 2023 or whether it will stop within the next few months.
It has also been said that the corporation has decreased the percentage it contributes to its employees’ 401(k) plans from 5% to 2.5%.
According to the source acquainted with the subject, Intel has also stopped giving merit
raises and quarterly performance bonuses to its employees.
According to a statement released by Intel, “while we continue to navigate macroeconomic challenges and aim to decrease expenses across the firm, we’ve made some revisions to
our 2023 employee compensation and rewards programmes.”
“These adjustments are intended to have a more significant impact on our executive
population, and they will assist fund the investments and total staff that are required to
drive our transformation and fulfil our long-term plan.”
Intel Layoffs 2023: CEO, surviving staff to take pay cuts days after sacking 340 people
The decision comes after Intel issued a bleak forecast the previous week, predicting that
the current quarter will be one of the worst in the company’s more than 50-year history.
Intel’s profits have been wiped away, and the company’s financial reserves have been
depleted as a result of the increased competition and the significant decline in demand for personal computers.
At the same time, Gelsinger intends to make an investment in the future of the company.
He has been working on a recovery strategy at Intel for the past two years with the goal of regaining the company’s position as the technological leader in the $580 billion chip market.
In the meanwhile, Gelsinger is going to continue to use funds to reward shareholders.
The statement that Intel will continue to provide a competitive dividend was released the
previous week.
The slowdown has prompted analysts to anticipate that the corporation may reduce its payment in order to remain profitable.
Read more about how Intel sees a bleak first quarter for personal computers here.
As part of Gelsinger’s master plan for the corporation, new production technology is going
to be introduced at a rate that has never been seen before.
Additionally, it plans to construct additional manufacturing facilities in both Europe and the United States, where it will compete for orders from other chip manufacturers as an
outsourced manufacturer.
This move will place Intel in direct rivalry with Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co., two Asian businesses that have surpassed it in the rankings of
chipmakers by size and capability. Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co.
The reduction of executive compensation is not unique to Intel or other major corporations.
Tim Cook, the chief executive officer of Apple Inc., will see his annual compensation reduced by more than forty percent, to a total of forty-nine million dollars, beginning in 2023.
Similar decisions have been made by other prominent financial institutions, such as
Goldman Sachs Group Inc., whose CEO David Solomon will have his remuneration reduced by approximately 30 percent to $25 million in 2022.
Intel is also taking additional actions to reduce its spending.
As part of an effort to save $3 billion per year, this involves cutting the number of
employees as well as slowing down spending on new plants.
According to the projections made by the corporation, by the end of the year 2025, that
number will have increased to more than $10 billion annually.
After informing employees earlier on Tuesday about the most recent round of layoffs, Intel has decided to reduce the percentage of employee contributions that the company will
match.
The Santa Clara, California-based corporation expressed gratitude to its staff members for their perseverance and
dedication.
Workers who are paid on an hourly basis and employees who are lower than the seventh
layer in the company’s system will not be impacted.
According to a statement released by Intel, “while we continue to navigate macroeconomic challenges and aim to decrease expenses across the firm, we’ve made some revisions to
our 2023 employee compensation and rewards programmes.”
“These adjustments are intended to have a more significant impact on our executive
population, and they will assist fund the investments and total staff that are required to
drive our transformation and fulfil our long-term plan.”
The decision to cut costs is not unexpected when one considers that the company has
announced lower profit margins in light of the fact that the personal computer market is
experiencing sluggish development and a decline in sales.
The level of competition is currently rather high, and Intel is said to have lost some market share to its competitors like AMD, as evidenced by statements made by Intel’s CEO to
Reuters. The market is also apparently becoming increasingly competitive.
As was just noted, Intel is not the only technology business that is considering lowering the salaries of its workforce in the near future.
Apple, which is one of the few technology businesses in the world to avoid widespread layoffs, has also reduced pay, but the reductions only apply to the compensation of the
company’s CEO, Tim Cook.
According to the story, the CEO agreed to take a wage drop of more than 40 percent in the year 2023.
The CEO of Intel, Pat Gilsinger, along with the rest of the company’s employees, will now take pay cuts ranging from 5 to 25 percent after the company sacked 340 people the previous day.
On January 31, Intel made public an announcement regarding its layoffs for the year 2023. The announcement included the disclosure that the chipmaker’s California Campus has let go of 340 people.
Employees at Intel would see a reduction in their pay.
Depending on their overall package, the extent of these pay reductions might range anywhere from 5% to 25%.
Pat Gilsnger, the Chief Executive Officer, would be required to take the largest pay cut possible, equal to 25 percent of his current salary.
Intel has announced that they have made various changes to their 2023 employee compensation and reward programme in order to “continue to navigate macroeconomic headwinds and work to cut expenses throughout the firm.”
The statement went on to explain that these alterations had been made to facilitate investments, workforce, and the acceleration of the company’s development.
The implementation of these modifications would assist Intel in realising its long-term strategic goals.
According to rumours, the salary of Intel’s executive leadership will be lowered by fifteen percent under the proposed plan.
The base salaries of Senior Managers and Mid-level Managers will each see a reduction of 5 percent, while the basic salaries of Senior Managers will see a reduction of 10 percent.
Employees of Intel who are not on the seventh pay tier or who are hourly rate workers at the chipmaker behemoth would not be negatively affected by these pay reduction.
Cutbacks at Intel 340 workers were let off from the California Campus in 2023.
An official statement issued by Intel revealed that the company would be terminating the employment of 340 workers at its California Campus in the United States.
According to the official statement that was distributed by Intel, “These are difficult decisions, and we are dedicated to treating affected employees with decency and respect.” [Citation needed]
Intel
The Worker Adjustment and Retraining Notification, or WARN notification, was followed by the decision to lay off employees.
Under this provision, companies are required to provide employees who will be affected with a notice period of sixty days.
According to the news outlet IANS, the official Intel notice stated that “all impacted personnel are being advised of separation with at least 60 days’ notice,” and that “the first separations are presently slated to occur during a 14-day period commencing on March 15, 2023.”
This is not the first time that Intel has declared that they will be laying off employees.
The world’s largest chip manufacturer said in December 2022 that it would begin laying off 111 employees on January 31, 2023 at its location located at 1900 Prairie City Drive.
Intel revealed additional information in January 2023, stating that this number would rise to 176 in the near future.
