Recently, Intel revealed its intention to cut nearly 20,000 jobs as part of a strategy aimed at reducing costs. With a current workforce of approximately 125,000, this means that around 15% of its employees will be affected by these layoffs. The goal of Intel is to achieve savings exceeding $10 billion by the year 2025, which will be accomplished through these workforce reductions and additional steps such as operational adjustments and decreased capital expenditures.
In comparison to other major tech firms, Intel’s pay rates are relatively modest. In 2022, the top salary at Intel for an engineering manager was approximately $263,000. In contrast, Nvidia’s salaries spanned from $74,460 to $786,000, while Microsoft and Alphabet provided salaries ranging from $77,000 to $310,000 and from $55,000 to $340,000 respectively.
The annual compensation for various roles at Intel includes:
– Business Intelligence Analysts: $65,437 to $142,438
– Information Security Analysts: $107,994 to $170,248
– Supply Chain Planning Analysts: $85,467 to $96,034
– Product Marketing Engineers: $102,606 to $150,093
– Mechanical Engineers: $81,765 to $121,576
– Engineering Managers: $117,624 to $263,952
– Application Developers: $92,488 to $121,763
– Program Managers: $67,621 to $168,834
– Data Scientists: $65,229 to $152,681
The discrepancies in salaries between Intel and its rivals may influence the company’s decision to downsize its workforce. As Intel undergoes these changes, it must find a balance between cutting costs and attracting and maintaining top talent in a fiercely competitive market. The layoffs and reductions in dividends have triggered a lawsuit from Intel’s shareholders.
Workforce Cuts and Cost Reduction at Intel
Shareholders assert that these actions, which have resulted in a noticeable decline in Intel’s stock value, were not communicated effectively. Intel is experiencing heightened competition from AMD and NVIDIA, amplifying the pressure on the company to enhance its financial results.
As part of its cost-cutting measures, Intel is introducing a voluntary retirement program in Israel. Employees with five years of service will be granted four months’ salary, those with over ten years will receive ten months’ salary, and employees with over thirty years will be eligible for nineteen months’ salary. Intel Israel anticipates losing anywhere from several hundred to 1,500 employees out of its workforce of 11,700.
Globally, Intel’s layoffs are expected to impact roughly 17,500 employees, which is around 15% of its total workforce. The company plans to streamline operations and cut costs in areas such as R&D, marketing, management, and mergers and acquisitions. Initiatives that do not align with Intel’s near-term objectives or show limited business potential are likely to be discontinued.
The voluntary retirement initiative in Israel will take place in two phases, focusing first on long-term employees before extending to all staff, excluding those at the vice president level or higher. Intel aims to finalize these changes by November to minimize the necessity for involuntary layoffs.
