The CEO of Intel has taken a 25% pay reduction

Intel Corp., which is dealing with a fast reduction in revenue and profitability, is reducing manager compensation across the board in order to deal with the fragile economy and save funds for an ambitious turnaround plan.

The chipmaker said on Tuesday that CEO Pat Gelsinger will get a 25% pay decrease.

His executive leadership team will have their compensation slashed by 15%.

Senior managers will see their pay slashed by 10%, while mid-level managers will see their pay cut by 5%.

“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,” Intel said in a statement.

“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.”

The decision comes after Intel issued a bleak forecast last week, predicting one of the worst quarters in the company’s more than 50-year history.

Profits have been wiped out and Intel’s financial reserves have been depleted as a result of stiffer competition and a dramatic downturn in personal computer demand.

At the same time, Gelsinger want to invest in the future of the firm.

He has been in charge of Intel’s recovery attempt for two years, with the goal of regaining the company’s technological leadership in the $580 billion semiconductor market.

Meanwhile, Gelsinger will continue to use cash to reward shareholders. Last Monday, Intel stated that company remained committed to paying a competitive dividend.

Analysts believe the corporation may reduce its dividend to compensate for the downturn.

Gelsinger’s plan calls for the corporation to implement new manufacturing technologies at an unparalleled rate.

It will also establish additional operations in Europe and the United States, as well as compete for contracts from other chipmakers as an outsourced producer.

This move would pit Intel directly against Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co., two Asian chipmakers that have surpassed it in terms of size and capability.

Intel isn’t the only major corporation cutting executive pay. Apple Inc., one of the only corporate behemoths to avoid mass layoffs, is reducing CEO Tim Cook’s compensation by more than 40% to $49 million for 2023.

Some high-profile financial organisations have taken similar adjustments, with Goldman Sachs Group Inc. CEO David Solomon’s 2022 salary reduced by almost 30% to $25 million.

Intel is also cutting costs in other ways. This involves layoffs and delayed investment on new factories as part of a $3 billion yearly savings initiative.

According to the business, this sum will rise to as much as $10 billion every year by the end of 2025.

Intel, which told employees of the new cuts earlier this week, is also decreasing the match it provides for pension payments.

Employees at the Santa Clara, California-based corporation were praised for their patience and dedication.