That's rough. While one would appreciate upper management sharing a bit more in the pain, why aren't shareholders? Okay maybe don't completely eliminate the dividend, but why not cut that as well?
Shareholders are just as complicit in this state of affairs. The active holders of Intel stock should have long ago agitated for Krzanich's removal and should have never accepted a non technical CEO like Bob Swan but for an interim role. It was obvious to many semiconductor industry watchers that Intel was a slow moving train wreck. And what about the board? Are they sharing in any of the cuts? All of them should be fired IMO for being asleep at the wheel.
BTW, Intel had quarterly pay bonuses? That was pretty nice I guess, since I have mostly experienced or heard about annual bonuses (other than one off for exceptional work).
yes Intel has both quarterly bonuses - based on quarterly results per a formula, and an annual bonus, again based on company performance and results. In the good years, these bonuses were very sweet. Many people count on them vs. budgeting on just base pay, which is now being cut. Fun times.
Interesting. I wonder what the genesis of the quarterly bonus was. Many companies do have quarterly stock aware vesting which I guess is one kind of bonus but with a view of retaining the employee longer term. I suppose it might be a way to replicate that without stock awards/options.
5% of the annual salary as a match was fairly common. If you earn say 100K to 200K (common in tech), the max employee portion of the 401k would be around 20-10% anyway. Some match a fixed amount like 5%, some match 50% of all employee contributions with some setting a ceiling as well.
AFAIK, only certain industries like healthcare implement the profit sharing 401k where the employer contributes extra towards the 401k from the profit (employer 401k contribution limits are much larger). But IMO this is because many healthcare organizations and employment structures are not public and cannot give out stock awards to promote an ownership culture of being vested in the company doing well and sharing in its success.
I know right? Intel never did a traditional 401k match like many companies. They set a percentage of pay and drop that into an Intel Contribution Account for each employee.
Intel employees are not doing to be quiet quitters. We are going to build back our credibility. In case you haven't noticed, Intel treated all it's employees with utmost dignity and respect throughout it all. In fact, we employees are happy to cut our pays so as much employees get to keep the jobs. Which is much better than waking up and finding that we can't log into our laptops anymore. Great companies emerge better in tough times. Intel is a great company.
Please speak for yourself. No employee wants to work in an environment of uncertainty. The people who just got laid off or salaries reduced were told just they were doing well just 6 months ago .
You think Intel is acting like a jerk when they fired and lowered the salaries of those people? There was no other option. Intel is not a charity, you would've done the same if you had your own company.
Competition is fierce and not just for selling products but also to acquire capital.
Dylan here is just being emotional because he has an agenda to follow and make happen and that is bring semiconductors production and technology innovation to the US while slowing and impeding China's progress.
China is a walking economic zombie at this point. The rapidly aging demographics means their workforce will be a fraction of what it is today in a decade or less.
You're buying too much in the hype because you're very emotional when it comes to China. I was like you. They want you to ignore the facts because they want to tarnish China's reputation.
Unfortunately for them hating China with a passion doesn't change GDP or build infrastructure.
You're living in an illusion and your emotions are jailing you in it. The good thing for China, is that you'll concentrate on false diagnosis and you'll never be able to reach your goal.
Jan, are you a manager at Intel or are you an engineer?
You talk like a manager. If Intel doesn't make up with the pay cut and missed bonus, there will be a mass exodus of engineers once the recession is over and job market is hot again
I am not sure if this is the right place to discuss this, but Intel needs some financial ratios straightened out to position itself for future investments and projects. These financial ratios are the ones that will attract capital and make some loans possible.
Keep this in mind:
1. Cutting costs is always good as long as it doesn't affect sales.
2. Cutting salaries in a recession is the most appropriate time to do it, since employees don't have a choice.
3. Paying a dividend while knowing you can get free money from the government, is, in fact, financially sound. Your stock price will not drop, and your capacity to borrow will stay up.
R&D is, I'm sorry to say, sometimes wasteful if not managed properly. If an R&D location is not producing any results. Then it's just a waste.
The salary cuts are well crafted. They won't be losing employees over it. Samsung and TSMC are coming in, but they will pay even lower salaries and have the worst benefits and working conditions.
Intel is not aspiring to be patriotic or anything of the sort. They want free money (like all companies) and want to cater to shareholders' interests. If it conforms to the big US strategy, then so be it. If not, then, well, tough luck. Maybe next time.
Should read the book “Only the paranoid survive” by Andy Grove” At the end of the day it is all about the technology and staying competitive. All this woke shit is a distraction. Engineer, engineer, engineer!!!!
Dude... workplace diversity is not the cause of Intel's downfall, and that's definitely not why had so many strategic and technological failures that led to where they are today. There is nothing wrong with workplace diversity.
I was there in 2015 when BK was so big on this. The hiring process became "you can either hire a minority / female or no one at all". HR would filter resumes so hiring managers weren't even given the choice of interviewing non-diversity candidates. Managers had to decide "should I hire no one or hire this person who isn't qualified?" I'm also aware of diversity employees having their performance reviews "hand of god" adjusted by HR after managers submit them, so negative comments are removed. There was also a few rounds of diversity employees getting pay bumps for no reason other than in the name of "pay equity". Once word spread that Intel was hiring any-female-with-a-pulse, you have no idea how many indian females came flooding in and they couldn't be removed no matter how incompetent they were: they would just get bounced from group to group like a toxic potato.
It was as toxic of an affirmative action program as you can imagine. Does that sound like a recipe for technical excellence? It was mildly hilarious how HR was having to dance around what they were saying when it was blatant Equal-Opportunity-Employment violations. "It's not a quota it's a target metric that we need to hit!"
This is crazy, I knew about this in other firms. Didn't cross my mind it will be the case in Intel. Intel can't afford to do this. Because if they do, they will be less competitive and will need to lower the salaries of their employee and maybe prop up the dividend to shareholders to keep the quiet. Oh, wait....
1. Keeps Dividends -> awards large stock holders rather than employees.
2. Keeps buying full of "hot air" Israeli companies, after getting duped by investment Banks, and then sells 10 cents on the dollar (DSP Communications etc).
3. Keeps pushing DIVERSITY hiring at any cost and hires bunch of workers who know they will NOT GET FIRED or LAID-OFF!
4. Bought Sundari Mitra's Co and made her VP but ZERO contribution from her or her company!
5. Nepotism is rampant to protect particular large country's employee base! They will fire/lay people of other countries but will protect their countrymen!
6. Intel Oregon thinks they r the "center of the Universe". So arrogant!
7. AZ site doesn't do any meaningful design.
8. Everything at Intel is complicated because it protects the job of those people who support them.
Intel situation today is because the executives believed its fab to chip was the best model while foundry /fabless model was flourishing . Slow transition to mobility products while hoping datacenter biz to grow. Unfortunately, fabless company like AMD and nVidia continue to launch products faster and cheaper. Hope is no use, fail to change is fatal. USA CHIPS Acts can only help so much on short term for Intel.
Paying dividends in the time when the company is bleeding is the stupidest thing, which benefits no one even long term shareholders; Intel needs all the capital it can accumulate to build fabs capacity and boost R&D, because it is an industry where only tech supremacy and capacity wins, mediocre dies! Comments above on wastage in R&D, sorry this is the nature of high tech: you don’t know if you are wasting money until you tried, you just need to try 10x alternatives until you find a good one;
I do feel that gpu pricing is a major reason why sales for cpus are lower. That's and covid sales were a temporary high, they were never going to be anything more for the pc desktop enthusiast
That's rough. While one would appreciate upper management sharing a bit more in the pain, why aren't shareholders? Okay maybe don't completely eliminate the dividend, but why not cut that as well?
Shareholders are just as complicit in this state of affairs. The active holders of Intel stock should have long ago agitated for Krzanich's removal and should have never accepted a non technical CEO like Bob Swan but for an interim role. It was obvious to many semiconductor industry watchers that Intel was a slow moving train wreck. And what about the board? Are they sharing in any of the cuts? All of them should be fired IMO for being asleep at the wheel.
BTW, Intel had quarterly pay bonuses? That was pretty nice I guess, since I have mostly experienced or heard about annual bonuses (other than one off for exceptional work).
yes Intel has both quarterly bonuses - based on quarterly results per a formula, and an annual bonus, again based on company performance and results. In the good years, these bonuses were very sweet. Many people count on them vs. budgeting on just base pay, which is now being cut. Fun times.
Where I used to work they did up to 3% quarterly bonus based on what you made that quarter. So only up to 3% for the year.
However, after taxes, it isn't worth carrying about really. It is a small blip on your paycheck.
What is crazy interesting, 5% 401k? Is that the only contribution? If it is im amazed how low that is.
Interesting. I wonder what the genesis of the quarterly bonus was. Many companies do have quarterly stock aware vesting which I guess is one kind of bonus but with a view of retaining the employee longer term. I suppose it might be a way to replicate that without stock awards/options.
5% of the annual salary as a match was fairly common. If you earn say 100K to 200K (common in tech), the max employee portion of the 401k would be around 20-10% anyway. Some match a fixed amount like 5%, some match 50% of all employee contributions with some setting a ceiling as well.
AFAIK, only certain industries like healthcare implement the profit sharing 401k where the employer contributes extra towards the 401k from the profit (employer 401k contribution limits are much larger). But IMO this is because many healthcare organizations and employment structures are not public and cannot give out stock awards to promote an ownership culture of being vested in the company doing well and sharing in its success.
I know right? Intel never did a traditional 401k match like many companies. They set a percentage of pay and drop that into an Intel Contribution Account for each employee.
My “like” means oooof
Intel employees are not doing to be quiet quitters. We are going to build back our credibility. In case you haven't noticed, Intel treated all it's employees with utmost dignity and respect throughout it all. In fact, we employees are happy to cut our pays so as much employees get to keep the jobs. Which is much better than waking up and finding that we can't log into our laptops anymore. Great companies emerge better in tough times. Intel is a great company.
Please speak for yourself. No employee wants to work in an environment of uncertainty. The people who just got laid off or salaries reduced were told just they were doing well just 6 months ago .
well still about 2.5% of the employees are not keeping their jobs. and if you think the people cuts are over - good luck with that.
You think Intel is acting like a jerk when they fired and lowered the salaries of those people? There was no other option. Intel is not a charity, you would've done the same if you had your own company.
Competition is fierce and not just for selling products but also to acquire capital.
Dylan here is just being emotional because he has an agenda to follow and make happen and that is bring semiconductors production and technology innovation to the US while slowing and impeding China's progress.
China is a walking economic zombie at this point. The rapidly aging demographics means their workforce will be a fraction of what it is today in a decade or less.
You're buying too much in the hype because you're very emotional when it comes to China. I was like you. They want you to ignore the facts because they want to tarnish China's reputation.
Unfortunately for them hating China with a passion doesn't change GDP or build infrastructure.
You're living in an illusion and your emotions are jailing you in it. The good thing for China, is that you'll concentrate on false diagnosis and you'll never be able to reach your goal.
Jan, are you a manager at Intel or are you an engineer?
You talk like a manager. If Intel doesn't make up with the pay cut and missed bonus, there will be a mass exodus of engineers once the recession is over and job market is hot again
I am not sure if this is the right place to discuss this, but Intel needs some financial ratios straightened out to position itself for future investments and projects. These financial ratios are the ones that will attract capital and make some loans possible.
Keep this in mind:
1. Cutting costs is always good as long as it doesn't affect sales.
2. Cutting salaries in a recession is the most appropriate time to do it, since employees don't have a choice.
3. Paying a dividend while knowing you can get free money from the government, is, in fact, financially sound. Your stock price will not drop, and your capacity to borrow will stay up.
R&D is, I'm sorry to say, sometimes wasteful if not managed properly. If an R&D location is not producing any results. Then it's just a waste.
The salary cuts are well crafted. They won't be losing employees over it. Samsung and TSMC are coming in, but they will pay even lower salaries and have the worst benefits and working conditions.
Intel is not aspiring to be patriotic or anything of the sort. They want free money (like all companies) and want to cater to shareholders' interests. If it conforms to the big US strategy, then so be it. If not, then, well, tough luck. Maybe next time.
Should read the book “Only the paranoid survive” by Andy Grove” At the end of the day it is all about the technology and staying competitive. All this woke shit is a distraction. Engineer, engineer, engineer!!!!
Great reporting! hard hitting stuff.
Can't help but remember this article from 2015... guess it didn't work out too well for them:
2015: Intel Allocates $300 Million for Workplace Diversity
https://www.nytimes.com/2015/01/07/technology/intel-budgets-300-million-for-diversity.html
Stock Performance since Jan 2015 when this announcement was made:
Intel: 0%
Nasdaq Index: +145%
Yes, that's what's wrong. I guess it's fitting your headshot looks straight out of an SS yearbook.
What is wrong about my analysis?
Why are you calling me a Nazi?
Dude... workplace diversity is not the cause of Intel's downfall, and that's definitely not why had so many strategic and technological failures that led to where they are today. There is nothing wrong with workplace diversity.
I was there in 2015 when BK was so big on this. The hiring process became "you can either hire a minority / female or no one at all". HR would filter resumes so hiring managers weren't even given the choice of interviewing non-diversity candidates. Managers had to decide "should I hire no one or hire this person who isn't qualified?" I'm also aware of diversity employees having their performance reviews "hand of god" adjusted by HR after managers submit them, so negative comments are removed. There was also a few rounds of diversity employees getting pay bumps for no reason other than in the name of "pay equity". Once word spread that Intel was hiring any-female-with-a-pulse, you have no idea how many indian females came flooding in and they couldn't be removed no matter how incompetent they were: they would just get bounced from group to group like a toxic potato.
It was as toxic of an affirmative action program as you can imagine. Does that sound like a recipe for technical excellence? It was mildly hilarious how HR was having to dance around what they were saying when it was blatant Equal-Opportunity-Employment violations. "It's not a quota it's a target metric that we need to hit!"
Intel should learn from AMD on how to do diversity the right way. Have female minority CEO and CFO.
This is crazy, I knew about this in other firms. Didn't cross my mind it will be the case in Intel. Intel can't afford to do this. Because if they do, they will be less competitive and will need to lower the salaries of their employee and maybe prop up the dividend to shareholders to keep the quiet. Oh, wait....
Maybe they wouldn’t have had those strategic and technological failures if they didn’t implement massive affirmative action.
I guess we'll never know.
In my view, they would have performed better if they chose to focus on meritocracy instead of affirmative action. A failure of culture!
kkkarlstack
you think I am in the KKK because I believe in meritocracy?
"massive affirmative action"
Lay off the podcasts and touch some grass.
https://i.imgur.com/rskPjw8.png
Do you think the bar to get hired for an Asian employee and a African American employee are the same?
Bad Intel, Bad Pat Gelsinger(FIRE HIM!):
1. Keeps Dividends -> awards large stock holders rather than employees.
2. Keeps buying full of "hot air" Israeli companies, after getting duped by investment Banks, and then sells 10 cents on the dollar (DSP Communications etc).
3. Keeps pushing DIVERSITY hiring at any cost and hires bunch of workers who know they will NOT GET FIRED or LAID-OFF!
4. Bought Sundari Mitra's Co and made her VP but ZERO contribution from her or her company!
5. Nepotism is rampant to protect particular large country's employee base! They will fire/lay people of other countries but will protect their countrymen!
6. Intel Oregon thinks they r the "center of the Universe". So arrogant!
7. AZ site doesn't do any meaningful design.
8. Everything at Intel is complicated because it protects the job of those people who support them.
Intel situation today is because the executives believed its fab to chip was the best model while foundry /fabless model was flourishing . Slow transition to mobility products while hoping datacenter biz to grow. Unfortunately, fabless company like AMD and nVidia continue to launch products faster and cheaper. Hope is no use, fail to change is fatal. USA CHIPS Acts can only help so much on short term for Intel.
We will see Broadcom trying to buy Intel in a few years. Pat just follow the same playbook at VMWare
Paying dividends in the time when the company is bleeding is the stupidest thing, which benefits no one even long term shareholders; Intel needs all the capital it can accumulate to build fabs capacity and boost R&D, because it is an industry where only tech supremacy and capacity wins, mediocre dies! Comments above on wastage in R&D, sorry this is the nature of high tech: you don’t know if you are wasting money until you tried, you just need to try 10x alternatives until you find a good one;
I do feel that gpu pricing is a major reason why sales for cpus are lower. That's and covid sales were a temporary high, they were never going to be anything more for the pc desktop enthusiast
Any insights on why the reluctant to cut/reduce the dividend? I'm sure it's must be obvious to them that the dividend may not be sustainable
cutting dividend will let stock price drop and give Pat more pressure to step down.
Who decides on the Intel dividend policy - the Board or the CEO?
I asked employees and don't see this anywhere. Any proof?
its referring to the size of the cut not duration. Cut is 3x for ELT, 5x larger for Pat.
My bad. I guess English not as first language threw me off. I'll delete the comment to avoid confusion.