• Some Intel employees took pay cuts in 2023 to cut costs and avoid layoffs.
• Intel has announced layoffs this year, affecting stock bonuses promised to employees.
• Cost cutting has changed the status quo of advantages and benefits at Intel.

January 2023 was a different world for America’s leading semiconductor companies.

Nvidia ended the month trading at $19.52 after reporting that revenue fell 21%. AMD traded at almost four times higher than Nvidia’s price.

At the time, Intel CEO Pat Gelsinger made a rare move. He took a Salary reduction by 25%. and asked many of its senior staff to take cuts of between 5% and 15% as part of a comprehensive cost-cutting effort. It has been restored affected salaries later that year.

To make up for lost wages, the company promised a “thank you” bonus in the form of one-time grants of restricted stock units, worth thousands for some, two sources said. Grants will be awarded in December 2023 and awarded in December 2024.

Since then, the chip industry has seen a changing of the guard as Nvidia ushered in the AI ​​boom. Meanwhile, layoffs and acquisitions have followed for Intel since it announced in August that it was going out of business 15,000 employees through voluntary separation agreements and redundancies. The affected employees had to leave the company just a few months before the “thank you” RSUs were to be awarded. Uncertainty over their bonuses was one of many setbacks, along with budget cuts and layoffs, that Intel employees have had to deal with in recent years.

A new round of layoffs began earlier this month, as Gelsinger announced a recovery plan in September to help the company become more capital efficient.

“We are executing on our previously announced cost action plan while maintaining competitive compensation and benefits programs,” an Intel spokesman said. “The actions we are taking are designed to make us a leaner, more efficient company and position the business for long-term success.”

BI spoke with eight current and former Intel employees for this report. They asked to remain anonymous to discuss internal matters because some still work at the company.

Most employees who received voluntary severance had target termination dates around September 30. The laid-off workers will mostly be gone by the end of November, according to WARN notices and LinkedIn posts by affected employees.

“I had such high hopes,” one engineer said of The return of Gelsinger company in 2021 and its roadmap. “Failures are understandable, but what will management do?”

“Thank you” bonuses.

After Intel announced the upcoming wave of layoffs in August, the company issued an FAQ sheet to employees, referring to an existing policy that said unvested RSUs are withheld and returned to the company on the employee’s last day. In other words, departing employees would not receive their “thank you” shares.

What followed was “furor,” said three Intel employees who accepted the voluntary buyout offer or were told they would be laid off. Intel employees left frustrated comments under FAQs on the company’s internal network, two departing workers said.

The issue eventually came up at a weekly Q&A with Gelsinger, one of the two employees said. Under pressure, the company changed course.

Departing employees affected by the 2023 pay cuts will now receive a cash equivalent of the stock price on Dec. 3 and will be paid on the next payday, according to a fired Intel worker.

“It was more of a general uproar over the fact that, at least for the unwitting, Intel was going to rip people out of their money – especially after making so many ‘margin’ level cuts in recent months,” said the same dismissed employee.

“I’ve been here all year and I’ve made the sacrifices,” said another former employee.

Reduction of benefits

Intel sent a slideshow with information about cuts to employee benefits at the August announcement of upcoming layoffs.

Intel announced it will reduce its global real estate footprint by two-thirds and consolidate its more focused hubs, according to a slide obtained by BI. The on-site gym would no longer offer personal training services. The slide also said reimbursement for internet, phone and commute costs would be reduced or eliminated.

In September, at least one office in Oregon posted signs informing employees that free fruit and drinks would no longer be available.

“It’s small, isn’t it? How much is a piece of fruit a day?” a former employee told BI.

A current Intel employee in Oregon said their floors were recently reinforced so “we can turn off the AC and the lights” on the others.

The cuts also affected higher benefits. An Intel employee would be eligible for a four-week sabbatical after every four years of employment or eight weeks after seven years. The slide said the sabbatical benefit was reduced to one month after seven years of service — leading to frustration for some employees who were due to take it soon and now have to wait, one departing employee said.

Employees were also previously able to take a corporate air shuttle that facilitated transportation and collaboration between select company sites in Arizona, California and Oregon. Now the shuttle has been suspended.

The timing of the cuts also made it difficult to plan retirement parties for employees — a company tradition. A retired Oregon Intel employee told BI that internal employee forums contained an updated list of frequently asked questions in September for those who chose the voluntary buyout. Employees were encouraged to initiate happy hours with each other and avoid the word “celebration,” despite the tradition of setting aside company funds for retirement parties.

“You don’t want to say, ‘Oh, we’re celebrating this person and spending money, but we’re also going to fire all these people,'” said one longtime employee who took over. “But it was still hard to get managers to consider just sending an e-book.”

Past benefits

Intel has long trailed other tech giants when it comes to home compensation.

SEC filings for Intel, AMD, Microsoft, Nvidia and Qualcomm show that average compensation over the past five years has risen by at least 12%, or in some cases much more, at all of these companies except Intel, where average compensation has increased by 4%.

An Intel veteran who accepted the acquisition told BI that the company’s benefits beyond the norm helped them maintain employee loyalty, even though the pay was lower than some peers. Technology companies in the industry were, too reducing employee benefits.

Some Intel employeesespecially those with the company for decades, walk away with impressive payouts. Two employees said they will receive 19 months of severance pay in addition to some longevity awards and sabbatical benefits that will be paid in addition.

In addition to periodic paid sabbaticals, Intel employees reached a new level of benefits when their age, combined with years of service, reached 55 and then 75, according to one employee. The “Rule of 75” is from a bygone era when corporations offered hefty pensions. Intel employees who joined the company before it closed his pension plan new entries in 2011 are still getting paid.

Even beyond the lifers who received benefits over the past decade, not all departing employees are bitter.

“Intel was generous when it shouldn’t have been,” said one laid-off employee of the compensation package offered.

Intel shares fell to a ten-year low in September, and the company can be removed from the blue-chip index — an index that tracks the most stable companies. The company reports third-quarter earnings on Thursday.

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