Intel to cut employee and executive pay by 5-25%: Report

US Chipmaker Intel is reportedly cutting the salaries of employees, amid economic slowdown and a week after the company posted a lower-than-expected sales forecast.   

The pay cuts will impact mid-level employees and executives, a person familiar with the matter told news agency Reuters. The reductions will range from 5% of base pay for mid-level employees to as much as 25% for Chief Executive Pat Gelsinger, while the company’s hourly workforce’s pay will not be cut, the report said.  

Intel also confirmed the pay cuts to Bloomberg. The company’s spokesperson Addy Burr said that “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”.   

A report by Financial Times said that this could be a cash-saving move by the US chipmaker to weather an expected downturn in the first half of this year.   

“The company was already facing a cash squeeze before the latest step down in sales. It is trying to maintain a heavy programme of investment in the face of a tumbling PC market, while also protecting its dividend payment to shareholders,” the report said.  

The announcement comes a day after Intel said it was laying off 340 employees at its California campus. The company fired the workers and gave them a 60-day notice period.  

In recent weeks, the chipmaker had already announced three rounds of layoff. In December last year it announced it was planning to lay off 111 employees at its Praire City Drive facility. Further, on January 11, it added that the number had risen to 176. Two days later, the chipmaker announced another round and said 167 workers were being let go permanently.   

Intel last week posted its Q4 2022 earnings with $700 million of losses and a 32% revenue plunge. However, Intel isn’t the only tech company which is planning to reduce the pay of the employees. Apple, had also trimmed down the pay as reported earlier in January, even though it was limited to the company’s chief executive Tim Cook, who reportedly accepted to take more than 40% pay cut in 2023.  

Other technology companies, Twitter, Facebook, Alphabet, Amazon, IBM, Microsoft and myriad other tech conglomerates across the world have terminated the contracts of thousands of employees.  Layoffs at Alphabet, Microsoft, Amazon and IBM combined have eliminated nearly 44,000 positions in January this year. According to a report published on January 5, 2023, by consulting firm Challenger, Gray & Christmas, the tech sector announced 97,171 job cuts in 2022, up 649% from the roughly 13,000 eliminated in 2021.