Pamplin Media Group is a KOIN 6 News media partner.
HILLSBORO, Ore. (PAMPLIN MEDIA GROUP) — Intel has announced big cuts this year, including pay and benefit reductions, as the computer chip manufacturing giant attempts to right the ship after a series of dismal earnings reports.
The company’s fourth-quarter earnings report, released Thursday, Jan. 26, showed a 32% decline in revenue. The summary warned that sales will likely continue to drop this year.
The pay and benefit cuts were first reported by the website SemiAnalysis, a publication that tracks news in the semiconductor industry.
“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 Corp. statement, Feb. 1, 2023
Salary cuts are based on Intel’s internal salary grades, with employees above mid-level ranks seeing base pay reduced by at least 5%. Vice presidents will receive cuts of 15%. The biggest cut is reserved for chief executive officer Pat Gelsinger, who will get 25% less in base pay.
Hourly employees and other junior staff, categorized as grade 6 or below, are not getting a pay cut, though other incentives and benefits are being cut across the board.
Quarterly pay bonuses have been eliminated, and annual bonuses are on pause, the website reports.
Retirement matches from the company are being halved from 5% to 2.5%.
In a statement provided to Pamplin Media Group, Intel said: “As we continue to navigate macro-economic headwinds and work to reduce costs across the company, we’ve made several adjustments to our 2023 employee compensation and rewards programs. 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.
“We are grateful to our employees for their commitment to Intel and patience during this time as we know these changes are not easy.”
The outlook has continued to get grimmer for Oregon’s largest corporate employer, which employs about 22,000 employees in Washington County alone. It has campuses in Hillsboro and Aloha.
Intel stocks took a hit last year after low quarterly earnings, and shares took another hit after the latest round of news. Intel stocks closed Tuesday, Jan. 31, at $28.26, a drop of nearly 50% from where they were last spring.
While the tech giant has not yet announced any large Oregon layoffs, it warned last year that cuts would be likely. It laid off more than 500 people in California, according to WARN Act notices filed with the state’s Employment Development Department.
Intel’s struggles come even after the company lobbied hard for the U.S. Congress to pass the CHIPS Act last year, which included a $280 billion investment in domestic semiconductor manufacturing and research. Intel raked in billions from that investment.
While no local layoffs have been announced as of Wednesday, Feb. 1, Intel did recently announce that it has scrapped plans for a $700 million “mega lab,” which was supposed to be built at the company’s Jones Farm campus in Hillsboro.