Intel is showing where its priorities are, slashing employee pay in an effort to maintain its quarterly dividend.
Intel is in trouble, with the company losing $8 billion of its market value in what has been described as a “historic collapse” that was triggered when the company warned it would miss analysts’ revenue expectations by billions.
According to SemiAnalysis, the company has now resorted to cutting employee pay in an effort to make its quarterly dividend. Principal Engineers, grades 7 to 11, will see a 5% cut. VPs will see a 10% cut and executive leadership will see a 15% cut. CEO Pat Gelsinger’s pay will drop by 25%.
According to The Oregonian, hourly employees’ pay won’t be cut, nor will their annual bonuses. They will, however, lose out on other incentives, such as merit-based raises, quarterly profit-sharing bonuses, and more.
“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,” Intel spokesperson Will Moss said. “We are grateful to our employees for their commitment to Intel and patience during this time as we know these changes are not easy.”
Intel’s strategy is an incredibly dangerous one since it risks alienating the very employees and engineers the company needs to turn things around. Cutting employees’ pay, in the middle of an economic downturn no less, sends a clear message to employees that they are not as important to leadership as lining investors’ pockets.
Our money is on this decision coming back to haunt Intel, with the company likely to start losing its top talent to companies that won’t sell them out.