COLUMBUS, Ohio — Intel plans to cut salaries for its executive and mid-level managers on a sliding scale.
CEO Pat Gelsinger will receive a 25% cut, with the rest of the executive team receiving a 15% cut and mid-level managers receiving a 5% cut.
Intel announced in January 2021 that it would build a $20 billion dollar manufacturing plant called a “fab” in western Licking County with the promise of 3,000 jobs.
When 10TV reached out to Intel for comment, a spokesperson said:
“As we continue to navigate macro-economic 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. We are grateful to our employees for their commitment to Intel and patience during this time as we know these changes are not easy.”
So what could this mean for Intel’s plans for Ohio?
“They are going to be horribly cash flow negative this year and that's not going to bode well for their technology ramp-up,” said Joe Albano, a technology reporter with Seeking Alpha.
“AMD (Advanced Micro Devices) hasn't reported that it's slashing salaries or laying off employees. This is definitely an Intel right sizing going on right now. 2023 is going to be their moment of truth on whether their 2025 goals are going to come to fruition,” he said.
The technology sector has been hit hard by layoffs.
More than 500 tech companies have announced layoffs since July 2022. Amazon, Google, Meta and Microsoft are expected to cut more than 10,000 jobs.
Industry experts see the layoffs as a result of tech companies going on hiring during the pandemic.
Intel says it plans to build two fabs in Licking County with the potential to create more.
Will its economic troubles prevent that from happening?
“It doesn't look good right now to start putting money towards those expansion plans. I think their focus is on the bare minimum that they've committed capital to," said Albano. "As long as things go well and Intel doesn't have a horrible back half of 2023, there are still chances they will be able to expand and produce more than what they are expecting today."