Intel Cuts Pay Across the Board To Avoid Layoffs (neowin.net) 97
segaboy81 writes: Internal reports of Intel cutting pay across the board are flooding the internet. It's now confirmed that CEO Pat Gelsinger will take a 25% cut, while everyone else takes a 5% to 15% hit. What's worse is it looks like they will remain cash-flow negative throughout 2023 despite all this. Intel's December earnings were revealed last week, showing significant declines in the company's sales, profit, gross margin, and outlook, both for the quarter and the full year.
Good idea, even if it feels bad (Score:5, Interesting)
This is a bit rough to take a cut like this, but I have to say at every company I've even been in I'd have been willing to take a pay cut to avoid layoffs....
In fact I remember at one of my first corporate jobs out of college, they were going through various rounds of layoffs and I suggested this idea, and that I'd be fine with a pay cut to avoid layoffs... so naive. They didn't take me up on it and they did keep laying off people.
Good luck to those at Intel, I hope you don't feel too bad about the cuts knowing that everyone gets to stay.
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Apparently the CEO does take a somewhat higher cut than everyone else. It is mostly symbolic, but it is not nothing.
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CEO Jennifer Tajada's 2022 salary increased 98% to $13.2 million [youtu.be] while she just laid off 7% off PagerDuty [pagerduty.com] employees, while quoting Martin Luther King for 'giving her courage' to do so in the process.
She could have saved a lot of jobs/families taking home less of her salary while still earning millions, but hey, she's CEO. If profits didn't increase, why does the CEO get such a large raise?
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Except Gelsinger's taking a pay cut too, the pay cuts only apply to senior/director level staff and above, and nobody is getting laid off? I'm hesitant to call his pay cut bigger than anybody else's because his pay cut is only to his base salary and not his additional compensation, but he's still getting the opposite of a raise. Intel's revenue has collapsed by almost half since last year, something has to give.
Re: capitalism bad (Score:2)
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Her salary didn't increase 98%, she got those things called stock options. Practically worthless pieces of paper unless she does something really good with the company, she may be able to trade some in the future. If PagerDuty burns, she gets nothing.
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Her salary didn't increase 98%, she got those things called stock options. Practically worthless pieces of paper unless she does something really good with the company, she may be able to trade some in the future. If PagerDuty burns, she gets nothing.
I was going to ask how you knew that, and if you knew what her exercise price was... then I realized I could just find the disclosure online: https://www.sec.gov/Archives/e... [sec.gov]
It looks like she just (last week?) exercised options for 187,607 shares at $2/share when the stock price was ~$28.30/share. That's $4,934,064.10 net, right? But hey, this crap's complicated. A lot of those shares were from a 2015 grant when the company was probably worth a bit less.
Do we know what kind of stock she got (and tied to w
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It depends, if a CEO suddenly pulls all their stock out of the market, the value of the stock is likely going to crater before the transaction is even approved by the SEC.
Not sure about this particular instance, yes, you can opt to trade some of those stock options if you need a pay day, but the value and amount highly depends on how well the company is currently doing.
Re: capitalism bad (Score:1)
Everyone is cutting back be it layoffs or other and all at the same time. So the crypto nonsense cost more than they will ever admit I'm convinced of that. Since we are trolling....the crypto companies should have been all founded by black people. Then people would have seen something wrong with it from the beginning.....and likely got back the investment they put in for the most part. *TROLL*
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The vast majority of Gelsinger’s compensation, however, is from stock awards and options. Gelsinger’s base pay was $1.25 million, according to his offer letter, or just under 0.7% of his nearly $179 million in total compensation for 2021
Total employee wages for Intel's ~120,000 employees are ~$12B, chopping the CEO's compensation would allow for a 1.5% raise across the board. For 120,000 people. Gelsinger made 1800x the pay of an average employee last year, anyone who doesn't think this is ins
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The $179 million was in one-time stock awards relating to his hiring (not ongoing compensation), and was conditional on the stock price hitting certain levels, which it didn't. His ongoing compensation for 2022 was targeted to be $26.3 million, but that was before their stock price collapsed, so it was probably worth more like $15 million in the end. Except it was also saddled with conditions on stock price targets that Intel didn't hit, so...
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$1.25 million / 125,000 = $10
Re:Good idea, even if it feels bad (Score:5, Interesting)
This is a bit rough to take a cut like this, but I have to say at every company I've even been in I'd have been willing to take a pay cut to avoid layoffs....
Back in a former job (20+ years ago), this was discussed - and we voted on it. I voted for the pay cut, but I think only one other person joined me... everyone else voted for layoffs.
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This is a bit rough to take a cut like this, but I have to say at every company I've even been in I'd have been willing to take a pay cut to avoid layoffs....
Back in a former job (20+ years ago), this was discussed - and we voted on it. I voted for the pay cut, but I think only one other person joined me... everyone else voted for layoffs.
The vote on that would likely depend heavily on A. how good the severance package is, B. how many of the employees can afford to lose their jobs (e.g. people on any sort of work visas would be screwed), C. how bad the overall job market is at the time (prospects for getting a job somewhere else), D. how many of the employees are nearing retirement age with enough savings that they no longer care, E. how much they enjoyed working for the company in the first place, and F. how good their pay currently is rela
Re:Good idea, even if it feels bad (Score:5, Insightful)
Promptly gets fired because they make more money than Stan, but Stan is good at brown nosing
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Stan gets screwed too. He now has to do his job and yours, and since he didn't get a raise this year, he really got an 8% pay cut due to inflation.
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everyone else voted for layoffs.
I would vote for layoffs during a healthy job market when I can easily find new employment.
Right now is not a good time for tech jobs, so I'd take a 5% pay cut.
Re:Good idea, even if it feels bad (Score:5, Insightful)
"Right now is not a good time for tech jobs"
It's not a good time for software jobs at big-name companies that over hired recently.
But there's more to "tech" than software at big-name companies.
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But guess where those people who were over-hired by FAANG are going to end up soon...
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Especially those who were lured in for big pay at long hours and then got the best of both worlds by moving somewhere cheaper and telecommuting without a paycut... can they keep it going?
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Starbucks?
Re: Good idea, even if it feels bad (Score:2)
You say that like Intel is a software company.
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No, I say that like the competition for Intel's workers is not software jobs at big-name companies that just had big layoffs.
Though to be fair, hardware design is 50% software (and 50% PowerPoint).
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Don't worry, you will feel just as naive again when they announce the layoffs later this year. Why just lay off when you can do layoff + paycut.
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Re:Good idea, even if it feels bad (Score:5, Interesting)
And Intel is genuinely in trouble, unlike pretty much all of the other tech companies that have announced layoffs recently, with the possible exception of Twitter (which is in trouble largely because Musk bought it and all the advertisers freaked out because they expected that he would wipe out any semblance of moderation — fears that turned out to be largely justified from all indications, i.e. their wounds are entirely self-inflicted from the top).
I'm always impressed when a company does some semblance of the right thing, largely because it happens so infrequently. Thumbs up to Intel's CEO and executive team for having the guts to tell the wealthy billionaire hedge fund investors to f**k right off.
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I'm always impressed when a company does some semblance of the right thing, largely because it happens so infrequently. Thumbs up to Intel's CEO and executive team for having the guts to tell the wealthy billionaire hedge fund investors to f**k right off.
You think giving $23 (yes, twenty three us dollar) bonuses and cutting base pay for employees that they need to retain and motivate is the right thing to do?
Why would someone busting their ass on the next Xeon stick around because Raji's GPUs turned out to be a piece of shit and the company's been mismanaged for decades?
Re:Good idea, even if it feels bad (Score:5, Insightful)
Perhaps the answer is yes. If they laid off a bunch of workers, they'd pay out a heap of money upfront but lose a lot of knowledge and skill that would help them recover. If they can retain workers for a year or two, anticipating an upturn, then they can preserve the knowledge and workforce that they need going forward. I'm sure paycuts will motivate some people to move on, but then again, maybe that's a lower level of attrition Intel can accept and it's certainly cheaper than paying them to leave.
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Intel has screwed themselves in the past by laying off skilled workers and then not being able to replace them.
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That's wh
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Perhaps the answer is yes. If they laid off a bunch of workers, they'd pay out a heap of money upfront but lose a lot of knowledge and skill that would help them recover.
To be clear, I'm not saying they should've fired people instead. That would be dumb (but not unexpected, obviously).
I'm suggesting they should've done neither. Maybe instead reconsider the $6B dividend payments or just lived with slightly higher costs for a quarter or two.
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Why would someone busting their ass on the next Xeon stick around because Raji's GPUs turned out to be a piece of shit and the company's been mismanaged for decades?
Because the current CEO hasn't been mismanaging it for decades. He just joined in 2021.
Because taking collective responsibility for the company's failings, including the current CEO, who largely didn't cause those failings, creates a much stronger sense of "we're all in this together, and if we work hard, we can turn this ship around" than having some percentage of your coworkers just not be there the next day while the CEO just takes a temporary performance-based reduction in pay that gets canceled out by
Intel Cuts Pay To Avoid Layoffs (Score:2)
Exactly, and that's the reason. Payroll is now lower, and people will start finding other jobs saving the cost and visibility of another RIF round.
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I wouldn't be fine with an pay cut for the same hours, but I once suggested cutting hours instead of layoffs (around 2008 or 2009, during the great recession). The managers and partners had already discussed and rejected that. Maybe they were right, since they ended up laying off almost 50% of the staff. And a couple of months later, I got laid off myself and ended up getting a job for 10% fewer hours at 10% less hourly pay, anyway, but what can you do?
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This is a bit rough to take a cut like this, but I have to say at every company I've even been in I'd have been willing to take a pay cut to avoid layoffs....
In this case, the pay cuts are also intended to protect the dividend. So the employees are asked (told) to take a cut so the investors do not. That is "fair" only if the employees get some stock options so that a future stock upside makes up for their current and future losses (you don't imagine that next years 3% increase will be based on the before-cut income, do you?).
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I have worked for a company where there was a real sense of camaraderie, and where I knew that my employer genuinely cared for his employees. He came to his employees with some hard financial facts about the company, and we made some sacrifices to try and keep the business solvent. In the end things didn't work out, and he helped me get my next job. Because of that I helped him with what was left of the company for years after I had left. After all, he was more than a former employer, he was a friend.
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I know someone who worked in a firm (not directly tech) where they had a bad couple of years and instead of cutting manpower the senior managment took a pay cut and the rest were told that they will not get bonuses / pay raises till things got better. I think things got back to normal a couple of years later.
The firm was still controlled by it's original founder at that time. Some time later the firm was taken over by a public listed giant and I really doubt that they will do the same again if needed this t
Re:Good idea, even if it feels bad (Score:4, Interesting)
It is hard to get away with this in a tight job market like right now. https://gizmodo.com/tech-worke... [gizmodo.com]
A lot of these Intel employees may leave rather than take a pay cut, so it's just a different way to accomplish the same staff reduction goal.
What we are seeing happen right now is the right-sizing of a lot of "big tech" and as a result a lot of the talent will finally be given back to the small and medium businesses that have been starving for that talent and unable to compete with the big tech comp packages.
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Bidenflation is going to be hitting well over 10 up to perhaps 20% in the next year if the Fed doesn't step in soon and cranks up the interest rates like it's 1980.
Most people have ALREADY taken a 10-20% pay cut over the last 2-3 years between overextended COVID measures, market dropping your 401k, higher costs and lower raises. Taking any paycut is going on top of that.
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I'll take some of what you are smoking bro
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In a "normal" year, I could see agreeing to something like a 5% pay cut.
(for non managers): However, inflation has been 10%, so simply not getting a raise this year leads to a 10% reduction in "purchasing power". Add a pay cut to that- and a great many people will have trouble paying bils for housing, car, food, energy etc.
I worked for Intel for a very short time years ago after my company was purchased. The culture of the company is very weird- almost cult or military like. I can see why their very inward
Agreed!! (Score:2)
I can live with 5-15% less money .. it better than 100% less money. Especially if the EVERYONE gets a cut. I've been at multiple companies where there were layoffs followed by upper management bonuses to congratulate themselves for 'lowering costs' .
Re: Good idea, even if it feels bad (Score:2)
seems pointless (Score:5, Insightful)
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Gelsinger was on a pay package of $1m is pay and about 180 million in benefits through stock options and stock awards. bet you a pretty penny the only part that is impacted by the 25% cut is that $1m cash income component.
Yeah it's just as well the stock price is doing well...
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The company is losing money. Gelsinger's options are underwater.
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The stock awards were still conditional on share price targets they didn't hit, and still plummeted in value when their stock collapsed, worth less than half what they were when he got them. They were also a one-time hiring bonus and not representative of his annual compensation.
25% pay cut (Score:3)
All over the board? Or just his "normal" pay while his bonus that makes up about 200 times more of his total compensation remains untouched?
Cut that insane bonus he gets and nobody has to take a pay cut. If anything, you could hire a bunch of people to get a decent processor out in time this time around.
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Nobody gives a fuck.
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Not to mention it recently passed a master exam for a MBA, so... yes, we can now finally replace our CEOs with a small script.
Then again, most of them could be beaten in their decision making ability by the average magic-8-ball...
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Then again, most of them could be beaten in their decision making ability by the average magic-8-ball..
Makes sense because their decisions are fueled with 8 balls already.
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while his bonus that makes up about 200 times more of his total compensation remains untouched?
Those bonuses are tied to performance and / or stock options. In both cases the value has decimated. You seem to not understand why CEOs are remunerated the way they are. You should look into what those bonuses are actually worth on paper when the company is being flushed down the shitter like it currently is.
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In other words, that pay cut actually increased that bonus, did I just get that right?
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Those bonuses are tied to performance and / or stock options.
Who knows just how their calculated though, since he made $180 million in 2021 when the stock dropped from $58 when he started as CEO to $51 at the end of the year. For all we know he still made over $100 million as the stock dropped to $30.
Intel even amended his stock performance package in Nov 2022, likely because they felt his pay would be too low in 2022 and he would leave the company. So even when the stock was tanking he likely made out like a bandit.
Just a bunch of crooks. Overall I'm not opposed to
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No he didn't make $180million. He made closer to $30million and was awarded non-vested stock options for the rest. Those stock options has since devalued by $90million, because that's how this works.
If you want to argue he made $180million in 2021, then great I'm going to argue he lost $90million in 2022.
Now we can happily debate about whether it's healthy to tie personal benefits to stock prices in this way, since its largely drives a purely short term investor focused running of a company, but there's no
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Cut that insane bonus he gets and nobody has to take a pay cut.
Eliminating his entire bonus would only amount to $1500 per employee, which is probably about 1% of the company's average total compensation. So it could at best reduce the pay cuts by 10% (from an average of 10% to 9%).
Involuntary pay cut? (Score:5, Insightful)
In any case, this is still a better option than letting lots of people go. One of the main reasons that Intel fell behind on chip releases is because they offered early retirement to lots of senior staff a few years ago, and boom they lots thousands or years of chip design experience while paying them to leave.
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No his salary was cut 25%. His stock options lost far more than that. Intel is on a hard and sustained downwards trend stock wise.
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Well Intel gained some 300% in stock value during COVID for no discernible reason. Seems fitting to lose that random stock value growth.
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Wasn't the prior to Gelsinger's return to Intel?
I understand the previous CEO was a finance person and did alot of stock buyback etc and cut r&d.
Thats how Intel share price had a short term bump and long term freefall.
If you are in an engineering firm which has to release new competitive products every year and the firm cuts r&d, you may as well look into leaving cos you know they going to get screwed in the near future.
Re: Involuntary pay cut? (Score:3)
If you are correct about attrition due to retirement causing Intel to fall behind, then perhaps Intel also failed to plan adequately for the retirement of its employees. You would think that some sort of succession plan would have been part of the equation.
My personal theory is that Intel has fallen due to the same fate as all other domestic US semiconductor companies. Like Micron, Texas Instruments, Analog Devices, etc, increasingly effective foreign competition has simply reduced their dominance in the ma
Personally, not buying Intel (Score:2)
If it is a choice between Intel and AMD, I'm buying AMD, but not only because they're awesome. Intel didn't take distributor sanction rule following as strictly as AMD. Since most of the financial mess at the moment seems to be war related, it'd be much cooler if Intel put more pressure on distributors.
https://www.reuters.com/invest... [reuters.com]
https://www.tomshardware.com/n... [tomshardware.com]
Not surprising (Score:5, Interesting)
One top-end Genoa can nearly keep pace with a twin-socket Ice Lake system with top-end platinum Xeons, simply because it has so many more cores. There was no way Sapphire Rapids was going to close a factor-of-2 gap, and this was confirmed at CES that it didn't... it doesn't even quite close the core count gap with Epyc Milan, with the largest SR processor having 60 cores where Milan tops out at 64.
Intel not investing in XUV when everyone else did continues to pay dividends for everyone else.
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I wonder if we'll ever start to see global data center net power usage [akcp.com] level off and start to go down instead of up. I suppose not anytime soon if neural nets become important in many applications.
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AMD has, quite frankly, been spanking them pretty badly for a while now on cores and throughput per socket.
on the server side perhaps (im not familiar), but intel makes the bulk of its revenue from the desktop/laptop side.
amd is closing the gap here, a bit reminiscent of the athlon 64 days, but is still not top dog. ryzen 7000 series has poor sales, am5 mobos are generally enormously expensive, and intel keeps taking the performance crown, even w/ intel's wussy P/E core configuration.
3d vcache will be cool, but will really only benefit some games.
Layoffs are trending (Score:1)
It's the dividend, stupid (Score:2, Insightful)
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Intel has $37b of debt, $11b of cash on hand and they're paying out $6b in shareholder dividends every year. Cut the fucking dividend stupid.
But then the stock price would go down!
Funny, though, Intel did announce a 5.2% dividend yield for March [yahoo.com] right after this story broke. And their share price has been up since.
Privatizing profits, socializing losses (Score:1)
Not enough! (Score:2)
They need to lose a lot more money, forced to sell their headquarters and many more things just to satisfy Karma for all the illegal shit they have pulled over the years.
They still pay a dividend (Score:1)
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No comment history available? But mod parent up anyway.
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