Intel Corp announced on January 31 that it has significantly reduced employee and management compensation, one week after issuing a lower-than-anticipated sales projection due to a loss of market share to competitors and a decline in the PC market.
The cutbacks would range from 5% of basic salary for mid-level staff to as much as 25% for the company’s chief executive, Pat Gelsinger, according to an unnamed source with knowledge of the situation who was not authorized to speak publicly.
Addy Burr, a spokesman for Intel, said in a statement that the “changes are intended to have a greater impact on our executive population and will assist support investments and the whole workforce.”
Intel reported this week that its profit margins were plummeting as the PC industry has cooled following many years of expansion during the epidemic.
Gelsinger also acknowledged that Intel had “stumbled” and lost market share to competitors like as Advanced Micro Devices Inc, which posted Tuesday quarterly sales that exceeded Wall Street’s estimates.
In addition to 5% cutbacks for mid-level staff, vice president level individuals would experience 10% reductions, and the company’s top executives other than the CEO will receive 15% declines, according to a source familiar with Intel’s compensation cuts.
In addition, the business has reduced its 401(k) matching program from 5% to 2.5% and banned merit raises and quarterly performance incentives, according to the source.
Annual performance bonuses based on Intel’s overall financial success will continue, although the size of these payments has diminished in recent years as the business has lost ground to competitors, the source said.