Yesterday, Intel Corporation announced cuts in compensation for senior and middle managers, after releasing weak quarterly financials. The move will affect thousands of employees in Israel at grade seven and upwards in the company’s internal classification.
Senior managers, such as divisional managers who report directly to the CEO will have their pay cut by 15%, while the basic pay of the CEO himself, Pat Gelsinger, will be cut by 25%. The pay of managers at vice president level will be cut by 10%, while middle managers, such as team heads, will take a cut of 5%. There will be no change in the pay of workers at more junior ranks. The pay of most of Intel’s employees at its Kiryat Gat fab will not be cut.
In addition, the annual bonus that Intel pays in February each year will be reduced. Until last year, when Intel posted high profits, the annual bonus averaged three monthly salaries. In line with the company’s lower profits, it will now be reduced to 1.5 monthly salaries. Quarterly bonuses, achievement-based bonuses, and pay rises have been frozen for the time being.
In October 2022, Gelsinger announced that Intel would embark on a three-year streamlining program that would cut $10 billion from the company’s cost base. He has been criticized in the past for his large compensation package. After taking over the top job at Intel in February 2021, he earned $178 million in eleven months, 1,711 times the average compensation in the company.
Intel Israel employs some 14,000 people, about 2,000 of them at subsidiary Mobileye.
"As we continue to navigate macroeconomic headwinds and work to reduce costs across the company, we’ve made several adjustments to our 2023 employee compensation and rewards programs," Intel said in a statement. "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."
Published by Globes, Israel business news - en.globes.co.il - on February 1, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.