Intel Corp announced broad pay cuts for employees and executives on Tuesday, a week after the company issued a lower-than-expected sales forecast due to a loss of market share to rivals and a PC market downturn.
The reductions will range from 5% of base pay for mid-level employees to as much as 25% for Chief Executive Pat Gelsinger, according to a person familiar with the matter who was not authorised to speak publicly.
Intel spokesperson Addy Burr said in a statement that the “changes are designed to impact our executive population more significantly and will help support the investments and overall workforce.”
Last week, Intel announced that its profit margins were falling as the PC market cools after several years of growth during the pandemic.
Gelsinger also admitted that Intel has “stumbled” and lost market share to competitors such as Advanced Micro Devices Inc, which reported quarterly sales that exceeded Wall Street’s expectations on Tuesday.
According to a source familiar with Intel’s pay cuts, in addition to 5% reductions for mid-level employees, vice president level employees will face 10% reductions, and the company’s top executives other than the CEO will face 15% reductions.
According to the person, the company has also reduced its 401(k) matching programme from 5% to 2.5% and suspended merit raises and quarterly performance bonuses.
Annual performance bonuses based on Intel’s overall financial performance will continue, but they will be smaller in recent years as the company has lost ground to competitors, according to the person.
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