Hot off the presses, we have confirmation from multiple employees that Intel is cutting costs tremendously at the expense of their employees. These cuts are broad-based, with employees having their compensation affected. Quarterly pay bonuses are gone, annual bonuses are being paused, 401k match is halved from 5% to 2.5%, merit-based raises are suspended, even patent filing rewards are cut down, and there is a pay cut to all employees’ base salary based on grade.
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).
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.
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!!!!
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).
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.
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%
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
Who decides on the Intel dividend policy - the Board or the CEO?