In January 2023, the landscape looked vastly different for major U.S. semiconductor companies. Nvidia’s stock closed the month at $19.52 after a 21% revenue drop, while AMD’s share price was nearly four times that of Nvidia’s. Amid this challenging period, Intel CEO Pat Gelsinger made a notable decision: he took a 25% pay cut and requested pay reductions of 5-15% for his senior staff as part of a cost-cutting strategy. Later that year, the affected salaries were restored, with a promise of one-time restricted stock units (RSUs) as a “thank you” bonus, slated for December 2023 with vesting in December 2024.
Since then, the semiconductor industry has undergone major shifts, with Nvidia leading the AI boom and Intel grappling with layoffs and buyouts. In August, Intel announced it would reduce its workforce by 15,000 through voluntary exits and layoffs, with many employees set to leave just months before the RSUs were to vest. For affected employees, these lost bonuses became one of many setbacks, along with budget cuts and job reductions, reflecting broader challenges Intel employees have faced.
This month brought a fresh round of layoffs, as Gelsinger rolled out a turnaround plan in September focused on making Intel more capital-efficient. “We are executing on our previously announced cost action plan while maintaining competitive compensation and benefits programs,” an Intel spokesperson noted, emphasizing the aim to build a leaner company positioned for long-term success.
Employee “Thank You” Bonuses
After Intel’s August layoff announcement, employees were given an FAQ sheet explaining that unvested RSUs would be forfeited upon an employee’s last day, leaving those affected without their promised “thank you” shares. This led to widespread frustration, with employees voicing complaints on the company’s internal network. The topic was eventually raised in a Q&A session with Gelsinger, and under pressure, Intel adjusted its stance.
Reduced Perks and Benefits
Alongside the layoffs, Intel rolled out slides in August detailing cuts to employee perks and its intention to cut its global office space by two-thirds. On-site personal training services were to be discontinued, and reimbursements for phone, internet, and commuting costs would be scaled back or eliminated. In one Oregon office, notices were posted stating that free fruits and beverages would no longer be provided.
Declining Compensation and Shrinking Perks
Historically, Intel’s take-home compensation has lagged behind some tech competitors. SEC filings show that, unlike other major tech companies where median compensation has risen by at least 12% in recent years, Intel’s median compensation only increased by 4%. For some Intel veterans, though, the benefits package has long been a reason to stay, even with lower pay compared to peers. Those taking buyouts after long tenures are often leaving with generous severance—some receiving up to 19 months’ pay and additional longevity and sabbatical benefits.
In years past, Intel employees could reach a higher tier of benefits when their age and years of service combined to total 55, then 75. This “Rule of 75” dates back to an era when Intel offered strong pension plans, though the pension was closed to new entries in 2011.
Despite the setbacks, not all departing employees harbor negative feelings. “Intel has been generous when they did not have to be,” noted one laid-off worker, who appreciated the severance package.
Intel’s stock hit a decade low in September, and the company faces potential removal from the blue-chip index. The company is set to report its third-quarter earnings on Thursday.