Intel reduces employee salaries; CEO to take 25% pay cut
A day after it announced plans to lay off about 340 employees at its Folsom Campus in California, Intel Corp. has confirmed that it has implemented pay cuts across the company. The reductions will affect employees in the mid-level to chief executive Pat Gelsinger. The company has been affected by consecutive weak quarters, with its revenue and earnings dropping rapidly.
Why does this story matter?
The ongoing economic uncertainty has forced tech companies to take drastic steps. 'Keep one's head above water' is the only mantra now. Some have resorted to layoffs, while others have reduced the pay of employees. Some have done both. Intel belongs to the third category. An underperforming PC market has affected the chipmaker badly, bringing its annual revenue down by 20%.
Pay cut ranges from 5% to 25%
The reduction in pay at Intel ranges from 5% to 25%. The company's CEO is taking a 25% cut to his base salary, while his executive team's pay has been reduced by 15%. Senior managers' pay has been decreased by 10%, while mid-tier managers are taking a 5% pay cut. The company's hourly workers and those below the seventh tier won't be affected.
Pay cut will help support investments and overall workforce: Intel
"As we continue to navigate macroeconomic headwinds and work to reduce costs across the company, we've made several adjustments to our 2023 employee compensation and rewards programs," Intel said in a statement. The company added that the decision to cut pay "will help support the investments and overall workforce needed to accelerate our transformation and achieve our long-term strategy."
Intel's revenue declined for the fourth quarter in a row
In the quarter that ended on December 31, Intel suffered a 32% year-over-year decline in its revenue. It was the fourth consecutive quarter where the company's sales fell. Compared to a profit of $4.62 billion in the year before, Intel posted a net loss of $664 million in the quarter. The firm expects more pain for investors in the first quarter of this year.
Intel plans to remove 544 employees in California
Intel has cut hundreds of jobs so far. The company first announced its plan to lay off employees during its third-quarter results. According to a Worker Adjustment and Retraining Notice (WARN) filed to the California Employment Development Department, the company plans to axe 544 employees in California. This includes 201 at its Santa Clara office and 343 at its Folsom Campus.
