Days after the chipmaker released disappointing fourth-quarter results that caused the company shares to decline, Intel executives will see pay reductions.
According to the company, CEO Pat Gelsinger's base salary will be reduced by 25%, with smaller pay reductions for other senior team members and midlevel managers.
Intel Is Cutting Down Costs In Response To The Tech Industry Crisis
The economy poses a radically abstract threat that is causing massive layoffs in the tech sector, but Intel is adopting a different tack, according to Gizmodo.
The business appears to have chosen against mass layoffs of its staff in favor of sweeping pay reductions ranging from 5% to 25%.
First to report on the salary reductions, Dylan Patel said that several staff members had informed him that some employees were bearing the brunt of Intel's efforts to reduce expenses in order to pay its quarterly dividend.
A source within Intel claims that all staff up to and including Principal Engineer will see their salary decrease by 5%, with the exception of hourly and junior-level workers.
It is important to note that Principal Engineers can make at least $170,000, according to Glassdoor and a Google Jobs ad.
Similarly, VP salaries will be reduced by 10%, the executive leadership team will get a 15% pay drop, and CEO Pat Geslinger will see a 25% pay cut.
Along with the reductions, there will not be any quarterly or annual bonuses for the time being, merit-based raises are on hold, and the 401(k) match is being decreased from 5% to 2.5%.
With that said, the real costs might be felt by Intel's lower-level staff, who, like many Americans, depend on bonus payments and retirement matching schemes, CNBC notes.
However, the company informed The Wall Street Journal that wage reductions will not apply to lower-level staff.
Read More: Intel Confirms It is Laying Off Workers in Operations, Sales Departments
Intel Tries To Navigate The Economy With Less Drastic Steps Moving Forward
According to local media, Intel is still apparently preparing to fire several hundred workers in California, which is still significantly less than other tech firms.
"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 details.
The company adds that these adjustments are intended to have a more significant influence on its executive population, according to Gizmodo.
Additionally, it will support the personnel and investments required to quicken its transition and realize its long-term vision.
Due to the reduction or elimination of the cash and bonuses that employees are accustomed to receiving, Intel will certainly collapse under these compensation cuts.
The macroeconomic climate that big tech likes to use as a rationale for layoffs is still a moving target, so there is no indication of when or even if pay will be restored to pre-cut levels.
By maintaining staff, Intel appears to be attempting to halt the relentless tide of tech layoffs, but they aren't the only company cutting CEO pay.
Tim Cook, the CEO of Apple, will receive a 40% pay cut as a result of shareholder input, while other digital giants like Amazon, Microsoft, Meta, and Google have recently fired thousands of workers.
These companies all stated some variant of an economic downturn or slowdown following the outbreak as their justification.
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