Intel Cuts Pay to Cut Costs
Layoffs are ravaging the tech industry due to the wildly abstract threat posed by “the economy,” but Intel is taking a different approach. Instead of laying off thousands of its workforce, the company has seemingly decided to make sweeping pay cuts from 5% to 25%.
Dylan Patel first reported on the pay cuts in his newsletter SemiAnalysis yesterday. Patel says that multiple employees have relayed to him that Intel is looking to cut costs to meet its quarterly dividend, and some employees are the ones footing the bill. According to a source within Intel, employees below and including Principal Engineer will be receiving a 5% pay cut with the exception of hourly and junior-level employees, who will not be affected by the cuts. Glassdoor and a Google Jobs posting reveal that Principal Engineers can make upwards of $170,000 at a minimum.
Likewise, VPs are taking a 10% hit, the executive leadership team is taking a 15% cut, and CEO Pat Geslinger will cut his salary by 25%. In addition to the pay cuts, there will be no quarterly or annual bonuses for now, merit-based raises are paused, and 401k match is is being reduced from 5% to 2.5%. Intel is still reportedly planning to lay off several hundred employees in California according to local media, which is still drastically less than other tech companies.
“As we continue to navigate macro-economic headwinds and work to reduce costs across the company, we’ve made several adjustments to our 2023 employee compensation and rewards programs,” Intel told Gizmodo via email. “These changes are designed to impact our executive population more significantly and will help support the investments and overall workforce needed to accelerate our transformation and achieve our long-term strategy.”
This is a modern day trolley problem: What’s worse, being laid off or taking an indefinite pay cut? Either way, morale at Intel will likely freefall under these pay cuts as the cash and bonuses employees are used to are trimmed down or gutted completely. There is also no indication of when (or even if) pay will be restored to pre-cut levels as the macro-economic environment big tech likes to cite as a reason for layoffs continues to be a moving target.
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Intel seems to be trying to avoid the unstoppable wave of tech layoffs by retaining headcount but they’re not the only one stripping executive pay. Apple’s Tim Cook is taking a 40% pay cut after shareholder feedback. This comes as other tech giants like Amazon, Microsoft, Meta, and Google have laid off thousands of employees in recent months, all citing some variation of an economic downturn or a slowdown after pandemic highs as the reason why.
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