31 Jan. (Reuters) – Intel Corp. (INTC.O) said on Tuesday it had made significant cuts to employee and executive compensation, a week after the company issued a lower-than-expected sales forecast due to a loss of market share to rivals and a downturn in the PC market.
The cuts will range from 5% of base pay for mid-level employees to as much as 25% for Chief Executive Pat Gelsinger, while the company’s hourly pay will not be cut, said a person familiar with the matter who was not authorized to speak in public.
Intel spokesperson Addy Burr said in a statement that the “changes are designed to give greater impact to our executives and will help support investments and the overall workforce.”
Intel said last week that its profit margins plummeted as the PC market cools after several years of growth during the pandemic.
Gelsinger also admitted that Intel has “stumbled” and lost market share to rivals such as Advanced Micro Devices Inc (AMD.O), which reported quarterly earnings on Tuesday that beat Wall Street expectations.
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The person familiar with Intel’s pay cuts said that in addition to the 5% cuts for mid-level workers, the vice president-level workers will see 10% cuts and that the company’s top executives, except for the CEO , get a 15% discount.
The company also cut its 401(k) matching program from 5% to 2.5% and suspended merit increases and quarterly performance bonuses, the person said.
Annual performance bonuses based on Intel’s overall financial performance will continue, but those bonuses have been smaller in recent years as the company lost ground to rivals, the person added.
Reporting by Stephen Nellis in San Francisco; Edited by Christopher Cushing and Jamie Freed
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