Intel CEO Pat Gelsinger Takes 25 Percent Pay Cut as Part of Company-Wide Salary Reductions

Intel provided a gloomy outlook last week when it predicted one of the worst quarters in its more than 50-year history.

By Reuters | Updated: 1 February 2023 15:39 IST

Intel CEO Pat Gelsinger Takes 25 Percent Pay Cut as Part of Company-Wide Salary Reductions

Photo Credit: Reuters

Intel is also reducing the match it offers to pension contributions

Highlights

Intel is struggling with a rapid drop in revenue and earnings
CEO takes 25 percent salary cut, leadership team faced 15 percent cut
Senior managers have taken a 10 percent salary deduction

Intel Corp said on Tuesday that it had made broad cuts to employee and executive pay, a week after the company issued a lower-than-expected sales forecast driven by a loss of market share to rivals and a PC market downturn.

The reductions will range from 5 percent of base pay for mid-level employees to as much as 25 percent for Chief Executive Pat Gelsinger, while the company's hourly workforce's pay will not be cut, said a person familiar with the matter who was not authorised to speak publicly.

Intel spokesperson Addy Burr said in a statement that the "changes are designed to impact our executive population more significantly and will help support the investments and overall workforce."

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Intel last week said its profit margins were plunging as the PC market cools after several years of growth during the pandemic.

Gelsinger also conceded that Intel has "stumbled" and lost market share to rivals such as Advanced Micro Devices, which on Tuesday reported quarterly sales that were above Wall Street's expectations.

The person familiar with Intel's pay cuts said that in addition to 5 percent decreases for mid-level employees, vice president-level employees will see 10 percent reductions and the company's top executives other than the CEO will get 15 percent cuts.

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The company has also lowered its 401(k) matching program from 5 percent to 2.5 percent and suspended merit raises and quarterly performance bonuses, the person said.

Annual performance bonuses based Intel's overall financial performance will remain but those bonuses have been smaller in recent years as the company has lost ground to rivals, the person added.

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