Intel Stock (NASDAQ:INTC)
A week after the business provided a sales estimate that was lower than anticipated due to a loss of market share to competitors and a slowdown in the PC industry, Intel Corporation (NASDAQ:INTC) said on Tuesday that it has made substantial cutbacks to the compensation of its employees as well as its management staff.
Pay for the company’s hourly personnel will not be reduced, according to a source familiar with the subject who was not allowed to talk publicly about the topic. The reductions will range from 5% of basic pay for mid-level employees to 25% for Chief Executive Pat Gelsinger.
Intel’s spokesman Addy Burr stated that the “changes are aimed to touch our executive population more substantially and will assist fund the investments and overall workforce.”
Following many years of sustained expansion brought on by the pandemic, the personal computer (PC) industry has begun to show signs of slowing down. This led Intel stock to report last week that its profit margins were collapsing.
Gelsinger also admitted that Intel has “stumbled” and lost market share to competitors such as Advanced Micro Devices (NASDAQ:AMD), Inc., which on Tuesday reported quarterly sales that were higher than what Wall Street anticipated would be the case. Gelsinger’s comments were made in response to AMD’s announcement that their sales had exceeded expectations.
The individual acquainted with Intel’s compensation cutbacks said that in addition to 5% declines for mid-level workers, 10% reductions will be seen by individuals at the vice president level, and 15% reductions will be seen by the company’s top executives other than the CEO.
According to the individual, the firm has also stopped awarding merit increases and quarterly performance incentives. Its 401(k) matching program has been reduced from 5% to 2.5% of employee contributions.
The annual performance incentives based on Intel stock overall financial success will continue. Still, the size of those payments has decreased over the last several years due to the company’s falling behind its competitors, according to the individual.
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