Several hundred Israeli employees of US chip giant Intel will find out in the coming days whether they will be laid off or recommended for voluntary retirement. Intel unveiled a plan two weeks ago to reduce its staff by 11% at all of its sites throughout the world, amounting to 12,000 of its 107,000 employees.
It is believed that several hundred employees will be laid off in Israel. Intel Israel has 10,000 employees in Jerusalem, Yakum, Haifa, Petah Tikva, and Kiryat Gat. Company management in Israel has not yet revealed the number of employees it intends to fire or assigned to one of the voluntary retirement programs. The cutback plan by the company in the US has already begun, and will be extended in the coming days to Europe and Israel.
Many of those to be laid off will be employees who have received low marks in their annual assessments by management. Together with the layoffs, the company plans to offer voluntary retirement to a large number of employees, with retirement terms described by one of the parties involved in the matter as "very good." Past voluntary retirement programs by the company have featured attractive packages of a year's salary or more in advance and many other benefits. In addition, the company plans to offer early pensions to employees over 58.
Together with layoffs and retirement for hundreds of Intel workers in Israel, it is believed that the company will consolidate its development centers in Israel, while cutting costs by moving many employees to a center it currently operates in Petah Tikva. It is also believed that other employees will be moved to other jobs in Intel headquarters in the US classified by the company as growth engines, such as the Internet of Things, big data, etc.
The cutbacks will also be felt at the company's main site in Kiryat Gat, where the upgrading of its fab is nearing completion. 3,000 workers are employed at the fab, and Intel has decided to expand it at an investment of NIS 22 billion in exchange for a NIS 1.1 billion grant from the Ministry of Economy and Industry Investment Promotion Center administration, plus attractive tax benefits. When the expansion and upgrade are completed, the number of Intel employees in Kiryat Gat is slated to grow and reach 4,000 next year.
Intel made it clear two weeks ago that despite its program of cutbacks, it would meet its obligations to the state concerning employees in Kiryat Gat. It is believed that employees in Kiryat Gat will also be laid off or assigned to a retirement program in the coming weeks, but new employees will also be hired for the site at the same time.
The notices to be received by Intel employees in Israel this week about their future in the company should disperse the cloud of uncertainty that has disturbed many of them over the past two weeks. "Uncertainty is felt mainly among the young employees at the company," a worker at one Intel site in Israel told "Globes."
"These are employees with up to five years of seniority, and they are disturbed and worried. Their anxieties are expressed mainly in conversations in corridors. They are wondering what will happen and to what extent they will be affected by the situation. There is much speculation. It is still unclear whether projects will be consolidated, and if so, which ones. There is natural anxiety here, but no hysteria. Some are saying that if they have to be fired, it's best to be fired from Intel. This company doesn't throw its workers to the dogs. The general feeling is that the company is like a father, and even if he sends you home, he cushions you pretty well before that. We hope that the company also offers attractive retirement plans to young workers, so that they can study and get organized more comfortably in preparation for getting work at another company. Intel isn't the end of the world."
At the end of 2014, Intel Israel offered an attractive voluntary retirement plan to workers in several of its production groups, as part of the changes it made in the composition of its staff at its work sites in Israel. The offer was a voluntary one, consisting of up to 20 months' salary, bonuses, and options amounting to up to several hundred thousand for some of the workers seeking to retire. Informed sources could not say anything today about the benefits to be offered by the company to those to be laid off and those to be offered retirement in the framework of the current cost-cutting program. At the same time, they predicted that the programs to be offered to the employees in the coming days would be attractive.
Published by Globes [online], Israel business news - www.globes-online.com - on May 1, 2016
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