In January 2023, the landscape was starkly different for leading American semiconductor companies. Nvidia was trading at $19.52 per share after reporting a 21% revenue drop, and AMD’s stock was nearly quadruple Nvidia’s.That same month, Intel CEO Pat Gelsinger took an unusual step: he cut his salary by 25% and asked senior staff to accept pay reductions between 5% and 15% as part of broad cost-cutting measures. Later that year, Intel restored the affected pay, supplementing it with a one-time “thank you” bonus in restricted stock units, scheduled for December 2023 and set to vest a year later.Since then, the semiconductor industry has shifted, with Nvidia’s success fueling an AI boom.
Meanwhile, Intel faced layoffs, announcing in August that 15,000 employees would leave through voluntary buyouts and layoffs. This wave came only a few months before the “thank you” RSUs would vest, leaving affected employees uncertain about bonuses amid budget cuts and ongoing layoffs. A new round of cuts began in October, while Gelsinger outlined a turnaround plan in September aimed at improving Intel’s capital efficiency.Intel acknowledged the challenges, saying, “We are executing on our previously announced cost action plan while maintaining competitive compensation and benefits programs. The actions we are taking are intended to make us a leaner, more efficient company and position the business for long-term success.
Losing of benefits anounced in August
“After Intel’s layoff announcement in August, employees received an FAQ sheet that cited a policy forfeiting unvested RSUs for departing employees, leaving those affected without their “thank you” shares. According to three Intel employees, this sparked backlash, with frustrated comments on internal networks and at a Q&A with Gelsinger. Under pressure, Intel eventually revised its stance.Following the August layoffs, Intel informed employees of scaled-back benefits. The company announced plans to reduce its global real estate footprint by two-thirds and consolidate key hubs. On-site gyms would no longer offer personal training, and reimbursements for internet, phone, and commuting would be cut or eliminated.
By September, some Oregon offices posted notices that free fruit and drinks would no longer be available.Over the past five years, SEC filings reveal that compensation for median employees at tech giants like AMD, Microsoft, Nvidia, and Qualcomm rose by at least 12%, while Intel’s rose only by 4%. A long-time Intel employee who accepted the buyout noted that non-salary benefits had helped retain staff despite lower-than-peer pay, though perks across the tech sector have been reduced.
Some departing Intel employees, particularly long-tenured ones, are receiving generous severance packages. Two employees reported 19 months of severance along with benefits like sabbaticals and longevity rewards. Intel’s benefits also included sabbaticals and “Rule of 75” perks for employees whose age plus years of service reached 75, a legacy from Intel’s pension era that ended in 2011.Despite tough transitions, some departing employees expressed appreciation for Intel’s severance offerings. “Intel has been generous when they didn’t have to be,” said one laid-off employee.
Intel’s stock fell to a decade-low in September, putting its position on the blue-chip index at risk. The company is set to report third-quarter earnings on Thursday.