US chipmaker Intel is cutting the pay of management across the company to cope with the shaky economy and preserve cash reported by news agency Bloomberg. The company on Tuesday said that it is making several adjustments to employee compensation and rewards to reduce costs.
According to the report, Intel’s CEO Pat Gelsinger is taking a 25 per cent cut to his base salary. Further, the executive leadership team will see their pay decrease by 15 per cent, Senior managers will take a 10 per cent reduction, and the compensation for mid-level managers will be cut by 5 per cent.
In a statement, Intel said, "As we continue to navigate macroeconomic headwinds and work to reduce costs across the company, we’ve made several adjustments to our 2023 employee compensation and rewards programs. These changes are designed to impact our executive population more significantly and will help support the investments and overall workforce needed to accelerate our transformation and achieve our long-term strategy.”
Earlier, Intel reported a revenue decline of 32 per cent year-on-year (YoY) in the quarter that ended December 31. It was the fourth consecutive quarter of falling sales for chipmakers. The company recorded a $664 million net loss, compared with a profit of $4.62 billion in the year-ago quarter.
According to Bloomberg, Stiffer competition and a sharp slowdown in personal computer demand have wiped out profits and eaten into Intel’s cash reserves.
At the same time, CEO Gelsinger is investing in the semiconductor business to penetrate the $580 billion industry. Under Gelsinger’s plan, the company is looking to introduce new production technology at an unprecedented pace. It will also build new plants in Europe and the US and try to win orders from other chipmakers as an outsourced manufacturer, the report said.
Other big companies have also trimmed the pay of their top executives. Apple Inc is cutting the pay of CEO Tim Cook by more than 40 per cent to $49 million and Goldman Sachs Group Inc. CEO David Solomon is seeing his 2022 compensation cut by about 30 per cent to $25 million.