Intel Management to See Big Pay Cuts, Non Management Affected Too

[TheLostSwede]

Intel didn't exactly report stellar results for the past year and now news out of the US are reporting that the management team is in for big pay cuts, due to missing the earnings targets. Unfortunately the pay cuts aren't limited to management level employees only, as everyone "level 7" and above are affected. Level 7 appears to be some groups of mid-level employees, such as staff engineers. Intel is said to have 14 different employee levels, where fresh graduates start at level 3 and the CEO is level 14. Pat Gelsinger is expected to see a 25 percent cut to his base salary, with the leadership team seeing a 15 percent cut in their base salary.

However, VP's are only seeing a 10 percent pay cut and those below VP—to level 6—will see a five percent pay cut. This is said to go into effect on the first of March and it might seem like those employees at lower hiring tiers are getting away without a pay cut, but it's not quite that simple. Everyone else will see a pay freeze and incentives will be cut for all employees at Intel. This includes suspended quarterly profit sharing bonuses, no employee recognition program and the retirement plan contribution matching cut in half to 2.5 percent. The only perk left will be the annual bonus. Considering the current state of the world, the upside of all of this, is that Intel is at least not laying off any employees as of right now, at least not officially. That said, we might see some employees jumping ship to Intel's competitors, if they can offer a more attractive package. We should point out that the average salary at Intel is around US$134,000, so it's unlikely that most of its employees will suffer due to the reduction in pay.



View at TechPowerUp Main Site | Source

 

[TheDeeGee]

 

[[XC] Oj101]

I like the way this is being handled. In SA, poor performance at a company will result in 1,000 job cuts, heavy pay cuts to the hardest working grunts, promotions to mid-level managers and a $50 million bonus to the CEO.

 

[phanbuey]

Pat is serious... nice.

 

[Chomiq]

It's a magic trick:

MSN

 

[mrnagant]

I read another article that employees are getting a 5% pay cut. I don't know how I feel about it. COLA isn't keeping up already as it is, so everyone is already taking a pay cut due to inflation. Intel wants to turn things around I don't see how you can effectively do that by cutting pay. That's a hit to moral. It seems like redoing incentive performance metrics and allowing for higher payout potential would drive employees to do better to meet the company's goals. I understand pay freezes but pay cuts, 401k contribution cuts, and bonus cuts. Dang. If the average salary is $134k, across the board that is roughly a $15k pay hit. I know I would be less inclined to excel, and my productivity would really take a hit for the first few weeks.

Where I work, back in 2020 we started a new initiative to be #1 against our competitors by FY2025. Starting FY2020 we were in the 75th percentile. Now we are borderline 25th percentile starting FY2023. As an incentive for this FY2023 year to hit our FY2023 performance goals, our bonus potential went from 5% to 8%. To me this is the right way. When you are struggling and need to turn things around and get back on track, it doesn't make sense to punish your workforce.

In terms of layoffs, Intel has been doing them. A coworker SO is a VP in one of Intel's departments and back in November they had to do a forced round of layoffs. It seemed like the first of many to come.

 

[TheLostSwede]

I read another article that employees are getting a 5% pay cut.

Read the news post again?

 

[Deleted member 177333]

The workers in general shouldn't receive a paycut in situations like this - the cuts should come from upper management so it's good to see Intel going that route to a degree. They get the bonuses when things are going well, so they should get the layoffs and have their bonuses and salaries slashed when things aren't going well.

 

[claes]

Sorry for the cross-post

FWIW the stock holders voted against stock options the past two years, and Intel didn’t hit the $74 mark. Not saying yay Intel or anything, just saying

Intel cuts CEO stock payouts amid layoffs

The reforms could be mostly symbolic because Intel’s declining share price may have put many of the awards out of reach.

www.oregonlive.com

Intel makes it harder for Gelsinger to earn beaucoup bucks

Shares have already been moving in the wrong direction for Gelsinger's stock awards

www.theregister.com

 

[mechtech]

“with the leadership team seeing a 15 percent cut in their base salary. However, VP's are only seeing a 10 percent pay cut”

tiny relative to salary

cut bonus
Cut stock option
$250k salary cap

that’s how to do it

 

[Scrizz]

I'd like to point out that $134k in the Bay Area and some of these other high cost of living areas isn't all that especially considering a basic 2Bd house costs over $1M.

 

[watzupken]

While it sounds like the pay cuts look ok since the management team is getting hit harder, the actual impact is actually greater to the people at the bottom of the chain. With real inflation still very high, mortgage increasing as well, a cut in salary for lower paid workers is going to sting. For the rich, it may be just a matter of spending a little lesser. For the common, it is a matter of not having enough money for running costs.

 

[ThrashZone]

It's a magic trick:

MSN

Hi,
Only magic trick is people actually going to msn for news

 

[Ownedtbh]

" it's unlikely that most of its employees will suffer due to the reduction in pay."

you guys cant imagine how rich people suffer from payment cuts....