Costing cutting efforts are in full force over at Intel, with the company aiming to lower employee salaries after laying off 500 employees last month.
The economic downturn is really starting to show its fangs, with scores of tech layoffs hitting headlines over the last few months. Intel has already joined the ranks of Google, Microsoft, PayPal, and others that are trying to mitigate the damage of the recession.
Now, Intel is taking it a step further by slashing employee salaries, including their CEO, who is taking a 25% pay cut following Intel's poor fourth quarter numbers that were greatly impacted by the PC market fall.
Intel to Cut Executive and Mid-Level Salaries
Announced in a statement from the company, Intel plans to cut salaries for its executive and mid-level managers on a sliding scale. The CEO Pat Gelsinger will receive a 25% cut, with the rest of the executive team receiving a 15% cut and mid-level managers receiving a 5% cut.
“The changes are designed to impact our executive population more significantly and will help support the investments and overall workforce.” – Addy Burr, spokesperson for Intel
That's right, Intel is not cutting the pay of any of its hourly employees, so at least they aren't tone-deaf to the economic hardships of those in lower-level positions. Still, with 500 layoffs last month and lowered salaries, it seems like Intel is really struggling to keep up with the economic downturn.
Why Is Intel Making So Many Cuts?
The recession is hitting all businesses pretty hard, with the vast majority of the tech industry keeping costs low and laying off employees in droves. Subsequently, it's safe to assume that Intel is doing its best to compete in these less-than-ideal economic times.
Still, Intel has plenty of problems beyond the economic downturn. The PC market isn't doing so hot, which is hitting the chip maker in more ways than one. Shares are down more than 5% since last week, and cuts are having minimal impact so far.
“We stumbled, right, we lost share, we lost momentum. We think that stabilizes this year.” – Pat Gelsinger, CEO of Intel
We'll be the first to say that CEO and upper management pay cuts are a step in the right direction and Intel's layoffs were certainly minimal compared to the massive numbers we're seeing from other tech giants like Microsoft and Google. Simply put, Intel is dealing with the recession in better ways than we've seen from other companies.
