Intel reported a fourth-quarter loss of $664 million last week making this its eighth consecutive bad quarterly result.
Intel Corp announced on Wednesday that it would slash the salaries of its executives and employees after the chipmaker forecasted one of the worst quarters in the 50 years of its business.
CEO Pat Gelsinger said that he would take a 25% pay cut, while the rest of the executive leadership team would witness a 15% cut in their salaries. The senior management’s pay would fall by 10%, while mid-level managers would get a 5% pay cut. The company hopes that the cuts will strengthen its attempts to support its plans to build new plants in the US and Europe, as well as win outsourcing contracts.
Last week, Intel said its profit margins were falling as the PC market cooled down after recording exponential growth during the pandemic. The company issued a lower-than-expected sales forecast driven by a loss of market share to its competitors such as Advanced Micro Devices (AMD).
The company has also lowered its 401(k) matching program from 5% to 2.5% and suspended merit raises and quarterly performance bonuses, reported Reuters.
Annual performance bonuses based on Intel’s overall financial performance would continue to exist but have grown smaller in recent years as the company has lost ground to rivals.
Last week, Gelsinger said that the company would continue its head-count reduction activity over the first part of 2023 to meet its $3 billion target. “We are executing more aggressively on the cost measures,” he added. He elaborated that the company was ending investments in specific networking hardware and restructuring the company. The company has exited seven businesses since he rejoined in 2021, providing $1.5 billion of savings.
Intel has fallen behind chip-making competitors such as Advanced Micro Devices (AMD) in the race to make the fastest chips with the tiniest transistors. The company’s revenue total has fallen below that of Taiwan Semiconductor Manufacturing Company (TSMC)and Samsung.