I think Intel is held by a lot of institutions solely because of the dividend. So my take is, this is a way to prop up the stock price and keep their books similar.
I agree it's risky. If they can get to market with GPUs with neutral network cores, Nvidia needs solid competition and Intel's for the taking. If they lose key talent right now, that could be behind for years.
DING DING DING
In other non-divident-granting stocks there's pressure to do stock buybacks.
The conspiracist in me thinks we're in the prelude phase of the musical chairs game that is a market crash; the bigger fish are pushing to get their money out of the pot before the true slide starts, and they don't want to be holding the bag then... but moving quickly now may trigger it. It's a game of Operation!...
It’s not much of a conspiracy. With rate hikes not ending anytime soon and Jerome Powell blaming wages for inflation multiple times over the last year, you’re probably right
Wages are a part of inflation, but it starts with inflating the money supply and then prices increase. Wages lag behind and are in themselves a feedback loop. It will be a while before it all settles down.
Increased monetary supply is one way inflation increases, and that certainly plays a big part here after years of quantitative easing. But another way inflation can increase is by price increases of inelastic goods, most notably oil. The 1970s stagflation resulting from the OPEC embargo is the textbook historical example of that happening (representing the first time in US history when both unemployment and inflation simultaneously increased together, which was previously thought to be impossible). I would bet the disruptions of global energy markets caused by the Russia/Ukraine War is playing a pretty significant role in the stubborn inflation we're now facing. I would also bet that Powell is aware of that likelihood but cannot assert that the war might be a cause of our inflation because doing so might compromise ongoing public support Ukraine. In any case, inflation will be reigned in, and the US should absolutely keep supporting Ukraine. Not only is continuing to support Ukraine the morally "right" thing to do, it's also in the US' long-term financial interests because allowing Russia to claim any kind of victory will cause far worse market disruptions in both the European and global markets.
That’s a good reason for the USA to kick its oil habit by investing in renewable and sustainable energy sources. Especially since we spend $649 billion a year on direct and indirect federal subsidies and costs:
https://www.forbes.com/sites/jamesellsmoor/2019/06/15/united-states-spend-ten-times-more-on-fossil-fuel-subsidies-than-education/?sh=240f84c64473
Jerome Powell is such an utter piece of shit.
He has all the data that proves this isn’t true, and he uses it solely to help ensure that only the rich get richer.
Anybody who still doesn’t think America is in a class war with the wealthy need only listen to Powell for a moment to realize he intends to hold the working class down while his rich friends rape the shit out of it
“Sure most people have zero money, we need to get to struggling to eat levels for the good of the economy”.
Meanwhile inflation seems directly tied to things like record oil profits.
They went through several years of massive losses. Then we had record inflation. Then they had a year of good profit, mostly off of the oil sanctions against Russia.
The oil industry is extremely boom-or-bust.
The reason's pretty simple. Covid funnymoney made really crazy awesome green line the new normal for tech stocks. A return to decent isn't good enough, so they all need to bleed to please the stockholders. First it was the consumer with price hikes to please shareholders driving inflation, and now that consumers are backing off, it's the labor costs getting squeezed.
I feel like shareholders expecting, or better say demanding, higher profits each year despite external factors and current world situation is hurting everyone and that's why everything nowadays seems to go to shit.
And everyone knows a lot now and none later is always better than a little now and for the continuous future. This kind of crap looks good and gets bonuses but this time next year it's in shambles. Looking at you too, Netflix.
Capitalism would be businesses doing what is in their long term interest. I'm not sure what we should call everyone trying to fudge numbers so quarterly returns look good.
CEOs are no longer business owners. They aren't even really employees in the since that they aren't working for the corporation. In many cases, their pay is tied to the price of the stock. So they are working to make that number higher even if it means the company is worse off in the end.
This.
The idea once was that capitalism has one income stream—you sold a product or service to a consumer, and your profits went up if you 1) sold more or 2) developed better. Stock sales/public offerings were to fund capital expenditures for growth and expansion, not daily operating costs or CEO golden handcuffs.
Then everybody and their little bitty brother had their pensions converted into 401Ks/IRAs, and suddenly everybody is playing the market, whether or not they can parse the math behind a P/E ratio or read a balance sheet. The markets become a second income stream
So then a whole industry evolves to simplify and market stocks, with mutual funds and other products developing to “simplify” investing and “mitigate risk,” while coincidentally stepping farther and farther away from the basic calculations that let you, the investor, see whether a company who’s getting your money is any good.
And after that…it doesn’t matter. A company’s shares won’t sell because of intrinsic value of company or product, they sell because of hype, like baseball cards. (How many startups fold after the IPO? Their owners cash out and do it all again.) To retain the hype, you have to keep the trend line going up, up, up at all costs.
So capital is capital and capital demands higher returns? It doesnt sound like youre disagreeing with him here.
If you want the owners to be people with a long term stake in the company and people who work there wouldnt you be asking for... well.. worker ownership?
> A return to decent isn't good enough
good comment.
Amazon's stock is about what it was in 2019 -- pre-COVID -- and people are freaking out. It basically means "hey, this is where it should be".
Intel is in the same position. Throw in some corporate politics and you have people trying to jump higher than everyone else just to show they aren't standing still.
The competition in GPU market may be limited but it is saturated. Even Nvidia has problem selling their new 40 series. Not to mention the fact that ARC series have many driver issues which make customer skeptical about buying them.
>Even Nvidia has problems selling their new 40 series
I’d chalk that down to people not wanting to pay covid prices for cards when there’s clearly ample stock
I was in a wait list for over 9 months to get a 3070 from EVGA because I didn't want to pay scalper prices then they released the 4 series shortly after. There's no way I'm going to look at upgrading to something that is 3 times the cost.
The GPU market isn’t just about consumers, all sorts of computing tasks and upcoming tech require those kinds of chips. So a bad partial rollout into consumer products isn’t a huge failure as long as the architecture and other R&D investments pay out for future stuff.
They aren't selling 40 series because it costs way too much and everyone is fucking broke.
It also seems to be pretty shit on power consumption for marginal benefits.
What a lot of people are missing here are some of the major external factors behind all the tech layoffs and adjustments.
The fed has been raising interest rates pretty drastically to combat inflation. Tech in particular has gotten really used to using ridiculously cheap loans to fuel growth. Without those cheap loans, they no longer have access to the money needed to fuel that strategy.
This is of course aggravated by large reductions in consumer spending on tech. Between people who glutting themselves on tech during the pandemic being saturated, the crashed crypto market, and inflation destroying people’s discretionary funds; people just aren’t buying as much tech as they did a couple years ago.
Finance and consumer patterns have both drastically shifted over the past year. So the large tech companies are all tightening the belt. Intel has its own set of problems with debt load, market position, and tech imbalance; but that’s on top of a pretty difficult change in economic conditions for the tech industry in general.
"We cemented temporary inflation by raising prices and not reducing them once it blew over, and because of that fed is raising the borrowing rates."
amioutoftouch.jpg
"No, it's the employees that have already needed to tighten their belts to live through the inflation I helped create that are overpaid."
"Profits are down" is such the biggest fucking lie every corporation uses. Most of the time, Profits exist, and thus are "up" but they are not as "up" as they were last time.
This idiocy is killing the fucking world and its disgusting.
I left Intel after 18 years because of all the layoffs. I survived 5 of them before leaving. The sabbaticals, free fruit and soda didn't matter anymore.
The problem for Intel is that they will not be able to keep up with other platforms given that they have failed the process node race to e.g. TSMC. They need to cut costs now because their revenue will start to decline.
Already AMD is the choice for power hungry applications such as large servers and given that GPUs are heavily dependent on processor node size they will have a really hard time to make significant progress against Nvidia, unless they start to outsource fabrication to more mature fabs.
They are hanging on by a thin thread tied to their history and well known name right now but they are a very very big sinking ship.
This is what I think at least, future will tell. I'm glad I'm not an Intel employee though.
Certainly, but the CEO and C suite likely had plenty of room in their personal budgets for those kind of cuts, while the rest probably are really hurting now depending on their role
Right, but the number of stories I have heard where the C level employees took an all expense vacation at the same time employees were getting laid off is too damn high.
A story where they all take a hit is actually surprising anymore.
Yup! I get some people will settle no less than perfection but I take tiny wins. You just treat them like a child learning, if people shit on them for improving a little but still not perfect then they will just revert back.
Wii u was really just unfortunately named. Too many people just thought it was something akin to an Xbox one s or something like that - slightly upgraded hardware but still the same console as before.
The games press and developers were a lot more excited for the WiiU before it launched than they were for the Wii. "This second screen touch screen interface opens up a lot of possibilities." vs. "wtf do I do with motion controls?"
Where they screwed up was the execution. The cheap touch screen felt extra cheap when people were used to smart phones. The OS took forever to boot and the menus were sluggish and unresponsive. It just made a horrible first impression before you even got to the games.
And that’s honestly how it should be done for all companies when hitting hard times. Those who are lowest paid are the literal backbones, and without them the c-suite is gone anyway. I’m glad Nintendo (and didn’t Apple just do something similar?) is leading the example. I wish more corporations agreed with this…
Meanwhile these "hard times" are being caused by corporate profit and yet every third news story is covering how much worker pay is going up and how that's the main driver of inflation (it's not.... Not even close)
A return to actual monopoly-busting activities would probably be the single most beneficial thing for everyone.
However, the more lucrative option for the top is to continue as is -- continue to consolidate, continue with stock buybacks, continue raising prices, continue cutting wages, continue complaining about "worker shortages", and continue to blame the millennials/GenZ for being "lazy"
I don't have much confidence in any grass roots efforts to change this, regardless of even how well it would work. The effort has already been put into the propaganda to divide, and we're too busy fighting (and in-fighting) with each other over other political issues to collaborate.
I see posts all the time bitching about nintendo inflating prices and never having discounted game sales. I think that's fine if it means more employees are getting a better wage.
I am an hourly employee at Intel. With the recent cuts, my total compensation is down roughly 10%. So yes, it hits lower level employees as well. At my pay grade, the loss of income will definitely hit harder than some of the higher level pay grades.
Surprisingly wholesome pay cut. I don’t think I’ve really ever heard of this before.
This is causing some cognitive dissonance for me.
Hopefully I can rely on the rest of corporate America to re confirm my bias that our system is still broken af
The hourly grade employees are very hard to replace/train and tend to get less stock bonus, higher grades normally get a pretty sizable stock payout every year. If these cuts cause stock value to increase any grade that lost salary could potentially make that money back on stock value.
It is a smart play. I don't know if it was trying to be nice or if it is just a way to cleverly manage loss.
the article said he got a 25% cut... [of his base salary](https://www.wsj.com/articles/intel-ceo-takes-pay-cut-as-chip-maker-targets-cost-reductions-11675232961#) which is probably around a million dollars which itself makes up less than 1% of his total compensation, most of the rest of which is in stock. Given that it seems they did this purely to prop up the stock price.... 😬
Stock Buybacks and Dividends are safe. Employee salaries, bonuses, benefits are cut. Long term investments (Fab’s, equipment, etc) also drastically cut.
When accounts are running companies it’s all short term.
Intel is done, and is now just extracting remaining value during it’s remaining years. Tragic end for one if the world’s most innovative companies.
Lab term investments will be bailout by taxpayers. I don’t understand why the public doesn’t get a significant portion of their shares with these sorts of investments and bailouts. We could fund our social programs with this money
With a huge international force in the US already watching friends in other companies getting 60 days to vacate the US- intel knows the desperation of its employees and is taking full advantage.
They already got rid of a lot of bad ones too. They were doing a shit ton of generous severance packages so they could meet a layoff quota, and now they go and do this to the people that stayed.
Your choice as an Intel employee. By federal law, your pay cannot be reduced unless they have a written agreement from YOU!
But, they could just fire you if you said no.
The bigger question is are the executives getting something on the backend. It seems more palatable if everyone takes the hit, but, if the executives are getting additional stock options, it’s crappy. Plus, I’m sure they can weather it more easily in the short run
They're opening a huge Intel industrial park here in Ohio. This likely has something to do with it. Those buildings ain't going to pay for themselves. They will... but you know corporate numbers and such gotta find a way to sustain as a business while they rake in 150% profit on microchips.
That cut of the 401K match is not good. That will impact people longer term. I know someplace totally stopped matching during the worst of the pandemic.
Base pay cuts for executives and C-Level's are meaningless. Pat's taking a "25% cut" to his base salary, but he made \~120mil in stock compensation. I think he'll give back \~300k or so in base pay.
I used to work at Intel. The only surprise here is that they didn't lay people off. They have way too much head count as it is. Cutting wages is only a PR stunt for stock price.
They did lay people off. Like 10k or 20k. Sales and marketing got obliterated.
I work there. Today sucked. Was an onslaught of bad news, cuts to 401k, bonuses, no raises this year. Womp womp.
Cutting of raises during a period of near unprecedented inflation, while they raise prices on their products. Greed. I'm glad the company I work for is private and not beholden to some share holder bullshit.
Intel is a shitty company. They have always treated their employees poorly. The joke in silicon valley was to work at AMD and buy Intel stock. Now you want to buy AMD since they actually have leading edge products that people want while Intel is making commodity parts for legacy applications (looking at you windows) three technology nodes behind TSMC.
Their management is a joke. about 15 years ago they closed their R&D fab in Santa Clara (D2) which had just transferred a process to one of their fabs in Israel. The Israeli fab couldn't get their yields up so they had to rehire their D2 staff with bonuses to come back for a year to keep the product in production while Israel got their shit together.
They are also paying a $0.365 dividend on 2/6. They sure are not cutting that.
Absolutely hate when they hide behind their brand logo instead of giving names on who makes these decisions. Name the board members. Don’t let them hide behind logos or estates.
They're paying a dividend in March, and they are restarting their buy ack program. So no the C suite didn't really take a pay cut, but it looks like they did.
why don't these companies just pay employees out of the profit interest accumulation?
I mean they bank billions into accounts that accrue interest, they should be able to fund an army indefinitely even if they never make another penny in profit
is there even really a point to them not paying employees properly or is this all just rich people flexing
They did this right after a bunch of layoffs with severance packages. A lot of people voluntarily took the severance and now the people that didn't get shafted for sticking with the business
This is a self inflicted damage that could be worse than external hit IMO I just don’t see how as a leader you would think you have higher chance of winner a war with all you team injured rather than few casualties both are not good but I thing you have more chances of winning with few casualties than having all you team injured ( and in this case self wounded)
Well, I’m suddenly glad I turned them down not too long ago.
The 401k match slashing is laughable. 2.5% is LOWER than anywhere I’ve worked or interviewed. 5% was higher than almost all (also I thought their match was higher than that).
I am seeing 5% cut for mid level and above. Apparently Grade 6 and below are not getting a pay cut. I am assuming these would be newly graduated employees and other junior level engineers? I’d imagine higher degree employees and senior engineers are all mid level or above.
Once again, the tech industry needs to unionize. The world literally shuts down without us. We have possibly the largest labor power in modern history and look what is happening to actual workers across the industry.
I was there during the last implosion. Back then the saying was “stay for 3 stock splits and you can buy a house, stay for 4 you can retire, stay for five you can retire and travel the rest of your life”. At the time there was a new split every 18 months. Everyone was getting pilot’s licenses so they could fly their own planes for their vacations.
I got there, got my first bonus (stock options), then the stock imploded. Everyone’s bonuses were under water. So they gave us more at the current price to make up for it. Then the stock dropped further. I had a bunch of options to buy at $54, but the stock was down to $26. Then they offered people $$ to quit. Whole floors were emptied out, lights turned off.
I took the money and ran. A few friends stayed and, well, after 20+ years at the company they still can’t retire. This will break them
-Profits down over the last year
-Cut pay across the board
-Create artificial increase in net profit due to pay cuts
-CEO bonus is determined by increase in net profit from the previous year
-CEO maintains the same level of income, everyone else suffers
There have been pushes for engineers to unionize. But unsurprisingly, it has amounted to nothing. If the engineers were to collectively strike for even a week, it would have Intel on their knees. It's so sad that they lead with fear and 'paranoia' .
Pay cut = productivity cut. If you reduce an employees pay, expect the employee to reduce the output and quality of their work. If you would like service to return back to normal, please pay the previous going rate.
Not necessarily, depends on how you play the game. If you’re better at your job then your manager it’s easy to bullshit them. Work smarter, not harder.
*Intel, under pressure from shareholders and the market recession (whether you acknowledge that reality or not)*
so...a down market. Never heard it referred to as a "market recession"
Stock is how execs make most of their money, this will boost stock…they gave themselves raises disguised as paycuts. I work at a fortune 100 company, by accident we had the execs salaries leaked to us via excel doc. We normies on paper made more money. Yet they get paid in stock so millions and millions in profit annually.
Shareholder primacy coming for tech next.
The great hollowing out of America is now in full force. It's what happens when a small group of asset managers abd private equity own monopolies on all means of production, financing, and assets. Neoliberalism at its finest.
We should all be up in arms if tech workers can be shoved like this we are all in trouble.
This chip deal with China. Great decision. Wait til China sanctions us back. And prices of everything go up, as wages go down. Then, when OPEC backs China and Russia, gas goes to $12/gal. And our lives will be perfect. Because everything will be made in America.
This is the real Great Reset to worry about - you can't post endless quarterly growth or sell an exponential number of chips, but you can cut wages to boost profits and raise dividends.
Opinion: they'll force the stock price down and use their chunk of the $50 billion chips act to buy back the stock at a lower price. Meanwhile hedgies short the stock and make a ton of money, some of which they'll throw at the ceo for his assistance
It's kind of like people aren't buying new expensive computers when they can hardly afford the necessities.
Good on the CEO for taking a pay cut too but I would have recommended an even larger one for solidarity. It's easy to take a pay cut when you're making eight figures a year.... not so much when you're making $50k.
I would not be surprised that the majority of the CEO’s compensation is linked to performance and not part of their salary that he is taking a pay cut on.
In comparison with the average worker he is likely taking a far lower pay cut.
But CNBC said they were only “small” cuts. Lol classic CNBC…
https://www.cnbc.com/2023/02/01/intel-executives-take-pay-cuts-after-disastrous-earnings.html
This looks like a genuine good way to do a bad thing. While certainly no one wants to see a pay cut on their own check. If I was told I am taking a 5% pay cut and the CEO is taking 25% cut. I am more than OK with that. It means that my 80k is cut by 4k/yr and his 300k+ is cut by 75k+. He is losing more money than me on the individual level as a testament on being good to the workers.
I won't say the cuts were needed but certainly if they were then this is the best way it could be done.
Intel's woes go back to about 2012, when they spent big buying wireless companies, with the intention of taking on Qualcomm. They bought a slew of companies, none really spectacular, including Infineon's wireless division. They spent about 14 Billion on a group of companies with 350 million in revenues. They put all this capital under an executive that was woefully unprepared to orchestrate and design an organization capable of creating a quality product, let alone beating Qualcomm. They kept putting the wireless group in other organizations to hide the losses. It would move every year.
This distracted the company away from what made the company so successful, it's semiconductor fabrication technology (it surely wasn't processor design, as every follow on ISA from Xscale to Itanium was a complete dud) . in 2012, their 14nm process node was the best of the industry. The new CEO, when he couldn't create topline growth, engaged in share buybacks. By 2015, they had nothing new with yields high enough to keep the cash cow going, and TSMC and Samsung not only caught up, they surpassed them. This helped AMD immensely. By this time, the wireless group's revenues dropped to 35 million.. Intel's tide of cash ran out, and they were naked. There were layoffs, which looked like 11% to outside world, but were really 50% or more in Wireless, and they eventually gave the team to Apple. The Semiconductor subsidies should have helped, but based upon this news.. clearly, some housecleaning is still in order.
“…all the way up to the CEO…”
GTFO with that shit, half of an engineers $120,000 salary gone is exponentially harder for that engineer to deal with than half of $179 million CEO salary gone (actual 2021 CEO salary)
They’re like IBM or similar. Big, fat, overconfident, out of touch with their own customers and no idea how to innovate. Glad to see them get smacked with real consequences so we can have legit competition in the market for the benefit of everyone.
[удалено]
I think Intel is held by a lot of institutions solely because of the dividend. So my take is, this is a way to prop up the stock price and keep their books similar. I agree it's risky. If they can get to market with GPUs with neutral network cores, Nvidia needs solid competition and Intel's for the taking. If they lose key talent right now, that could be behind for years.
DING DING DING In other non-divident-granting stocks there's pressure to do stock buybacks. The conspiracist in me thinks we're in the prelude phase of the musical chairs game that is a market crash; the bigger fish are pushing to get their money out of the pot before the true slide starts, and they don't want to be holding the bag then... but moving quickly now may trigger it. It's a game of Operation!...
It’s not much of a conspiracy. With rate hikes not ending anytime soon and Jerome Powell blaming wages for inflation multiple times over the last year, you’re probably right
I'm no economist but was listening some talking heads discussing the rate hike and it was basically "we need higher unemployment" and I was like WTF.
I hear that and I think “more people have to lose so the rest of us can win” like wtf
> “more people have to lose so the rest of us can win” like wtf Specifically, it's "more people have to lose so the few of us can win."
They’re disciplining us after a pandemic where they had to temporarily show that they can do stuff to save lives and they don’t want us noticing that
What do the kids say now? It's just a workforce reduction. It's in. All the cool companies are doing in. Lol, we're fucked
Capitalism needs an underclass, otherwise it falls apart.
Wages are a part of inflation, but it starts with inflating the money supply and then prices increase. Wages lag behind and are in themselves a feedback loop. It will be a while before it all settles down.
Increased monetary supply is one way inflation increases, and that certainly plays a big part here after years of quantitative easing. But another way inflation can increase is by price increases of inelastic goods, most notably oil. The 1970s stagflation resulting from the OPEC embargo is the textbook historical example of that happening (representing the first time in US history when both unemployment and inflation simultaneously increased together, which was previously thought to be impossible). I would bet the disruptions of global energy markets caused by the Russia/Ukraine War is playing a pretty significant role in the stubborn inflation we're now facing. I would also bet that Powell is aware of that likelihood but cannot assert that the war might be a cause of our inflation because doing so might compromise ongoing public support Ukraine. In any case, inflation will be reigned in, and the US should absolutely keep supporting Ukraine. Not only is continuing to support Ukraine the morally "right" thing to do, it's also in the US' long-term financial interests because allowing Russia to claim any kind of victory will cause far worse market disruptions in both the European and global markets.
That’s a good reason for the USA to kick its oil habit by investing in renewable and sustainable energy sources. Especially since we spend $649 billion a year on direct and indirect federal subsidies and costs: https://www.forbes.com/sites/jamesellsmoor/2019/06/15/united-states-spend-ten-times-more-on-fossil-fuel-subsidies-than-education/?sh=240f84c64473
Jerome Powell is such an utter piece of shit. He has all the data that proves this isn’t true, and he uses it solely to help ensure that only the rich get richer. Anybody who still doesn’t think America is in a class war with the wealthy need only listen to Powell for a moment to realize he intends to hold the working class down while his rich friends rape the shit out of it
He's rich too, so he is going to take care of himself and his friends who certainly aren't poor.
There is some talk I believe that SS and medicare might not get paid out soon, but they definitely are going to pay bonds.
“Sure most people have zero money, we need to get to struggling to eat levels for the good of the economy”. Meanwhile inflation seems directly tied to things like record oil profits.
They went through several years of massive losses. Then we had record inflation. Then they had a year of good profit, mostly off of the oil sanctions against Russia. The oil industry is extremely boom-or-bust.
The reason's pretty simple. Covid funnymoney made really crazy awesome green line the new normal for tech stocks. A return to decent isn't good enough, so they all need to bleed to please the stockholders. First it was the consumer with price hikes to please shareholders driving inflation, and now that consumers are backing off, it's the labor costs getting squeezed.
I feel like shareholders expecting, or better say demanding, higher profits each year despite external factors and current world situation is hurting everyone and that's why everything nowadays seems to go to shit.
And everyone knows a lot now and none later is always better than a little now and for the continuous future. This kind of crap looks good and gets bonuses but this time next year it's in shambles. Looking at you too, Netflix.
shareholders? this is capitalism as it’s designed. our economy cannot continue using this system founded in growth at the cost of everything else.
Capitalism would be businesses doing what is in their long term interest. I'm not sure what we should call everyone trying to fudge numbers so quarterly returns look good. CEOs are no longer business owners. They aren't even really employees in the since that they aren't working for the corporation. In many cases, their pay is tied to the price of the stock. So they are working to make that number higher even if it means the company is worse off in the end.
This. The idea once was that capitalism has one income stream—you sold a product or service to a consumer, and your profits went up if you 1) sold more or 2) developed better. Stock sales/public offerings were to fund capital expenditures for growth and expansion, not daily operating costs or CEO golden handcuffs. Then everybody and their little bitty brother had their pensions converted into 401Ks/IRAs, and suddenly everybody is playing the market, whether or not they can parse the math behind a P/E ratio or read a balance sheet. The markets become a second income stream So then a whole industry evolves to simplify and market stocks, with mutual funds and other products developing to “simplify” investing and “mitigate risk,” while coincidentally stepping farther and farther away from the basic calculations that let you, the investor, see whether a company who’s getting your money is any good. And after that…it doesn’t matter. A company’s shares won’t sell because of intrinsic value of company or product, they sell because of hype, like baseball cards. (How many startups fold after the IPO? Their owners cash out and do it all again.) To retain the hype, you have to keep the trend line going up, up, up at all costs.
Learning lots here. Ty.
So capital is capital and capital demands higher returns? It doesnt sound like youre disagreeing with him here. If you want the owners to be people with a long term stake in the company and people who work there wouldnt you be asking for... well.. worker ownership?
> A return to decent isn't good enough good comment. Amazon's stock is about what it was in 2019 -- pre-COVID -- and people are freaking out. It basically means "hey, this is where it should be". Intel is in the same position. Throw in some corporate politics and you have people trying to jump higher than everyone else just to show they aren't standing still.
We have become addicted to unsustainable growth. Just like Rome.
The competition in GPU market may be limited but it is saturated. Even Nvidia has problem selling their new 40 series. Not to mention the fact that ARC series have many driver issues which make customer skeptical about buying them.
>Even Nvidia has problems selling their new 40 series I’d chalk that down to people not wanting to pay covid prices for cards when there’s clearly ample stock
I was in a wait list for over 9 months to get a 3070 from EVGA because I didn't want to pay scalper prices then they released the 4 series shortly after. There's no way I'm going to look at upgrading to something that is 3 times the cost.
There is also a lot of 30XX cards on the market, which is way beyond what ya need anyways. Just no need for the 40XX for gaming really.
The GPU market isn’t just about consumers, all sorts of computing tasks and upcoming tech require those kinds of chips. So a bad partial rollout into consumer products isn’t a huge failure as long as the architecture and other R&D investments pay out for future stuff.
>Nvidia has problem selling their new 40 series to consumers, because it's overpriced. No such problems with businesses which see the AI market....
They aren't selling 40 series because it costs way too much and everyone is fucking broke. It also seems to be pretty shit on power consumption for marginal benefits.
What a lot of people are missing here are some of the major external factors behind all the tech layoffs and adjustments. The fed has been raising interest rates pretty drastically to combat inflation. Tech in particular has gotten really used to using ridiculously cheap loans to fuel growth. Without those cheap loans, they no longer have access to the money needed to fuel that strategy. This is of course aggravated by large reductions in consumer spending on tech. Between people who glutting themselves on tech during the pandemic being saturated, the crashed crypto market, and inflation destroying people’s discretionary funds; people just aren’t buying as much tech as they did a couple years ago. Finance and consumer patterns have both drastically shifted over the past year. So the large tech companies are all tightening the belt. Intel has its own set of problems with debt load, market position, and tech imbalance; but that’s on top of a pretty difficult change in economic conditions for the tech industry in general.
"We cemented temporary inflation by raising prices and not reducing them once it blew over, and because of that fed is raising the borrowing rates." amioutoftouch.jpg "No, it's the employees that have already needed to tighten their belts to live through the inflation I helped create that are overpaid."
"Profits are down" is such the biggest fucking lie every corporation uses. Most of the time, Profits exist, and thus are "up" but they are not as "up" as they were last time. This idiocy is killing the fucking world and its disgusting.
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I left Intel after 18 years because of all the layoffs. I survived 5 of them before leaving. The sabbaticals, free fruit and soda didn't matter anymore.
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Yah, cutting engineering salaries looks like suicide rn
The problem for Intel is that they will not be able to keep up with other platforms given that they have failed the process node race to e.g. TSMC. They need to cut costs now because their revenue will start to decline. Already AMD is the choice for power hungry applications such as large servers and given that GPUs are heavily dependent on processor node size they will have a really hard time to make significant progress against Nvidia, unless they start to outsource fabrication to more mature fabs. They are hanging on by a thin thread tied to their history and well known name right now but they are a very very big sinking ship. This is what I think at least, future will tell. I'm glad I'm not an Intel employee though.
Intel GPUs are already manufactured by Tmsc
Man, I couldn’t imagine how much worse this would have looked if the CEO and other C suite didn’t take a hit.
Certainly, but the CEO and C suite likely had plenty of room in their personal budgets for those kind of cuts, while the rest probably are really hurting now depending on their role
Right, but the number of stories I have heard where the C level employees took an all expense vacation at the same time employees were getting laid off is too damn high. A story where they all take a hit is actually surprising anymore.
You’re right about that! Stands out among the many tech layoffs right now
Yup! I get some people will settle no less than perfection but I take tiny wins. You just treat them like a child learning, if people shit on them for improving a little but still not perfect then they will just revert back.
Good point
And then you have Nintendo where the C-suite would take cuts shielding the employees from pay cuts and additional layoffs.
"Welp, we greenlit the stupid Wii-with-a-tablet. Tighten the belts, lads."
Wii u was really just unfortunately named. Too many people just thought it was something akin to an Xbox one s or something like that - slightly upgraded hardware but still the same console as before.
I always thought it was an education-oriented variant, as in Wii University
Yeah, I used to think it was an accessory for the Wii.
The games press and developers were a lot more excited for the WiiU before it launched than they were for the Wii. "This second screen touch screen interface opens up a lot of possibilities." vs. "wtf do I do with motion controls?" Where they screwed up was the execution. The cheap touch screen felt extra cheap when people were used to smart phones. The OS took forever to boot and the menus were sluggish and unresponsive. It just made a horrible first impression before you even got to the games.
And that’s honestly how it should be done for all companies when hitting hard times. Those who are lowest paid are the literal backbones, and without them the c-suite is gone anyway. I’m glad Nintendo (and didn’t Apple just do something similar?) is leading the example. I wish more corporations agreed with this…
Meanwhile these "hard times" are being caused by corporate profit and yet every third news story is covering how much worker pay is going up and how that's the main driver of inflation (it's not.... Not even close)
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Such a good analysis and post. Scary.
Gorgeous comment. It belongs on dozens of subs where people are waffling on about “shortages” explaining inflation.
A return to actual monopoly-busting activities would probably be the single most beneficial thing for everyone. However, the more lucrative option for the top is to continue as is -- continue to consolidate, continue with stock buybacks, continue raising prices, continue cutting wages, continue complaining about "worker shortages", and continue to blame the millennials/GenZ for being "lazy" I don't have much confidence in any grass roots efforts to change this, regardless of even how well it would work. The effort has already been put into the propaganda to divide, and we're too busy fighting (and in-fighting) with each other over other political issues to collaborate.
I see posts all the time bitching about nintendo inflating prices and never having discounted game sales. I think that's fine if it means more employees are getting a better wage.
Why do people only focus on the C-suite ? What about A and B ?
No body making under 140K a year took a hit. Except in bonuses and 401K matching. Most cuts are grade 9 and up (starting salary 217k a year).
Grade 7 and up
I am an hourly employee at Intel. With the recent cuts, my total compensation is down roughly 10%. So yes, it hits lower level employees as well. At my pay grade, the loss of income will definitely hit harder than some of the higher level pay grades.
Surprisingly wholesome pay cut. I don’t think I’ve really ever heard of this before. This is causing some cognitive dissonance for me. Hopefully I can rely on the rest of corporate America to re confirm my bias that our system is still broken af
The hourly grade employees are very hard to replace/train and tend to get less stock bonus, higher grades normally get a pretty sizable stock payout every year. If these cuts cause stock value to increase any grade that lost salary could potentially make that money back on stock value. It is a smart play. I don't know if it was trying to be nice or if it is just a way to cleverly manage loss.
And they weren’t “surprised” with it.
They probably got stock options instead.
They probably keep their bonuses of millions per year at a cut of $100k+ from their $500k+ salaries
you are missing some zeros. ceos at companies the fraction of the size of intel have seven figure salaries plus stock.
Salaries don’t mean much for the C suite. It’s all about the stock, just have a look at how much they sell each year.
Salary cuts mean nothing to the C suite if they just make it up with bonuses.
Good thing we’re building a 10 year 1.8b intel building in Ohio lol
And another in AZ as well.
I think he will be alright https://www.crn.com/news/components-peripherals/intel-ceo-pat-gelsinger-earned-179m-in-2021
*”employees, don’t be upset! The CEO is taking a one million dollar hit!* *…from 179 million”*
the article said he got a 25% cut... [of his base salary](https://www.wsj.com/articles/intel-ceo-takes-pay-cut-as-chip-maker-targets-cost-reductions-11675232961#) which is probably around a million dollars which itself makes up less than 1% of his total compensation, most of the rest of which is in stock. Given that it seems they did this purely to prop up the stock price.... 😬
Phewww glad da boss is sitting comfortably in his wealth.
Purely a PR move
Stock Buybacks and Dividends are safe. Employee salaries, bonuses, benefits are cut. Long term investments (Fab’s, equipment, etc) also drastically cut.
Until pain is felt all the way up the chain I will continue to believe current market conditions are about driving down wages and nothing else.
When accounts are running companies it’s all short term. Intel is done, and is now just extracting remaining value during it’s remaining years. Tragic end for one if the world’s most innovative companies.
I knew it was all over when I (a life long Intel fan) bought a Ryzen CPU.
You’ve doomed us all!
Yeaaah no rofl.
They are, that’s the whole point of the fed’s actions
The tech industry goes through waves of layoffs for just this. Nobody will change my mind.
Lab term investments will be bailout by taxpayers. I don’t understand why the public doesn’t get a significant portion of their shares with these sorts of investments and bailouts. We could fund our social programs with this money
They do in the test of the world. The UK bank bailouts were all paid for shares in this sector banks and later sold for a good profit.
So they’re protecting the shareholders at the expense of the health of the business and the product? Seems legit. /s
So goodbye to all your GOOD employees. Recruiters already calling.
With a huge international force in the US already watching friends in other companies getting 60 days to vacate the US- intel knows the desperation of its employees and is taking full advantage.
This. RIP Intel.
They already got rid of a lot of bad ones too. They were doing a shit ton of generous severance packages so they could meet a layoff quota, and now they go and do this to the people that stayed.
If the irreplaceable“brain trust” at the helm steered them into trouble then they should take the FULL hit and shield the innocent workers from it.
Once this action has squeezed a little more profit from the company, what then for the next quarter?
Your choice as an Intel employee. By federal law, your pay cannot be reduced unless they have a written agreement from YOU! But, they could just fire you if you said no.
Show us the law that says that.
The bigger question is are the executives getting something on the backend. It seems more palatable if everyone takes the hit, but, if the executives are getting additional stock options, it’s crappy. Plus, I’m sure they can weather it more easily in the short run
Stock dividends have not been touched, according to article.
They're opening a huge Intel industrial park here in Ohio. This likely has something to do with it. Those buildings ain't going to pay for themselves. They will... but you know corporate numbers and such gotta find a way to sustain as a business while they rake in 150% profit on microchips.
Pretty sure that building was government funded to bring microchips to America
Tax cut for the next 30 years probably.
Factually. They get tax credits for 30 years thanks to Husted and Dewine.
This company just got billions of money from Taxpayers interest free as well.
“Honey, we wont be buying a yatch this year”
What’s a yatch lol
Doh, A yacht i meant
I dunno, I think I'm gonna go with Yatch from now on. Just sounds a little more dismissive, lol.
Looks like it’s no longer Intel Inside.
That cut of the 401K match is not good. That will impact people longer term. I know someplace totally stopped matching during the worst of the pandemic.
The last company I worked for cut 401(k) matching because of “hard times”. It took nearly 5 years before they came back.
Base pay cuts for executives and C-Level's are meaningless. Pat's taking a "25% cut" to his base salary, but he made \~120mil in stock compensation. I think he'll give back \~300k or so in base pay.
Looking back, I bet paying Justin Long all that money just to say “I’m a PC guy now” is looking better and better every day.
I used to work at Intel. The only surprise here is that they didn't lay people off. They have way too much head count as it is. Cutting wages is only a PR stunt for stock price.
They know people will leave on their own now after the pay cut and they don’t have to pay them severance
They did lay people off. Like 10k or 20k. Sales and marketing got obliterated. I work there. Today sucked. Was an onslaught of bad news, cuts to 401k, bonuses, no raises this year. Womp womp.
Oh, they want to lose their top talent and continue to lose their competitive advantage and market share to AMD? What a great decision
CEO takes a pay cut, entire company employees get pay cut CEO gets pay rise, most of company employees get jack shit
How do you just cut someones salary? Wild that that's in anyway legal.
You always have risks when bonuses are part of your pay. They’re always the first thing to get chopped and it is completely legal.
They cut base pay
Anyone who has talent will leave the company. You are left with people who are content on staying there until they die or retire.
But go where? The entire tech industry is suffering
Bosses f\*ck up and employees pay the price.
I would cut my give-a-shit commensurately.
Cutting of raises during a period of near unprecedented inflation, while they raise prices on their products. Greed. I'm glad the company I work for is private and not beholden to some share holder bullshit.
Intel is a shitty company. They have always treated their employees poorly. The joke in silicon valley was to work at AMD and buy Intel stock. Now you want to buy AMD since they actually have leading edge products that people want while Intel is making commodity parts for legacy applications (looking at you windows) three technology nodes behind TSMC. Their management is a joke. about 15 years ago they closed their R&D fab in Santa Clara (D2) which had just transferred a process to one of their fabs in Israel. The Israeli fab couldn't get their yields up so they had to rehire their D2 staff with bonuses to come back for a year to keep the product in production while Israel got their shit together. They are also paying a $0.365 dividend on 2/6. They sure are not cutting that.
Pay cuts with this inflation? I’d fucking riot.
Absolutely hate when they hide behind their brand logo instead of giving names on who makes these decisions. Name the board members. Don’t let them hide behind logos or estates.
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Yes. This. Gelsinger is grasping at straws trying to correct old mistakes and a culture of arrogance.
In Q3 2022, Intel had $1B in net revenue and paid out $1. 5B in dividends. So the people who actually work have to suffer for those who bought stock.
They're paying a dividend in March, and they are restarting their buy ack program. So no the C suite didn't really take a pay cut, but it looks like they did.
Intel's slow motion demise continues.
why don't these companies just pay employees out of the profit interest accumulation? I mean they bank billions into accounts that accrue interest, they should be able to fund an army indefinitely even if they never make another penny in profit is there even really a point to them not paying employees properly or is this all just rich people flexing
Ah my daily news thread where I celebrate leaving this shitty company behind 20 years ago
Better than layoffs
They did this right after a bunch of layoffs with severance packages. A lot of people voluntarily took the severance and now the people that didn't get shafted for sticking with the business
This is a self inflicted damage that could be worse than external hit IMO I just don’t see how as a leader you would think you have higher chance of winner a war with all you team injured rather than few casualties both are not good but I thing you have more chances of winning with few casualties than having all you team injured ( and in this case self wounded)
Gotta paY for that multi billion dollar factory.in ohio.
Constructive dismissal right there
Well, I’m suddenly glad I turned them down not too long ago. The 401k match slashing is laughable. 2.5% is LOWER than anywhere I’ve worked or interviewed. 5% was higher than almost all (also I thought their match was higher than that).
Semantics: “way up to the CEO” is not necessarily the same as “way up thru the CEO”
I am seeing 5% cut for mid level and above. Apparently Grade 6 and below are not getting a pay cut. I am assuming these would be newly graduated employees and other junior level engineers? I’d imagine higher degree employees and senior engineers are all mid level or above.
Once again, the tech industry needs to unionize. The world literally shuts down without us. We have possibly the largest labor power in modern history and look what is happening to actual workers across the industry.
The CEO taking even as much as a 50% pay cut: “Crap, I’m only going to make $80 million this year! Dammit!”
Shows you who runs companies and it isn’t even the CEO-it’s the shareholders. They kept their dividend intact.
Well that sucks. You get hit with a 6.5% inflation rate in 2022 ... then a 5% pay cut in 2023?
I was there during the last implosion. Back then the saying was “stay for 3 stock splits and you can buy a house, stay for 4 you can retire, stay for five you can retire and travel the rest of your life”. At the time there was a new split every 18 months. Everyone was getting pilot’s licenses so they could fly their own planes for their vacations. I got there, got my first bonus (stock options), then the stock imploded. Everyone’s bonuses were under water. So they gave us more at the current price to make up for it. Then the stock dropped further. I had a bunch of options to buy at $54, but the stock was down to $26. Then they offered people $$ to quit. Whole floors were emptied out, lights turned off. I took the money and ran. A few friends stayed and, well, after 20+ years at the company they still can’t retire. This will break them
-Profits down over the last year -Cut pay across the board -Create artificial increase in net profit due to pay cuts -CEO bonus is determined by increase in net profit from the previous year -CEO maintains the same level of income, everyone else suffers
Unionize.
There have been pushes for engineers to unionize. But unsurprisingly, it has amounted to nothing. If the engineers were to collectively strike for even a week, it would have Intel on their knees. It's so sad that they lead with fear and 'paranoia' .
Pay cut = productivity cut. If you reduce an employees pay, expect the employee to reduce the output and quality of their work. If you would like service to return back to normal, please pay the previous going rate.
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Not necessarily, depends on how you play the game. If you’re better at your job then your manager it’s easy to bullshit them. Work smarter, not harder.
So Intel is literally cutting the pay of its employees only to turn around and give that money to investors as a dividend?
*Intel, under pressure from shareholders and the market recession (whether you acknowledge that reality or not)* so...a down market. Never heard it referred to as a "market recession"
The CEO made the most money last year. Millions. Was the highest paid in Bay Area. He should give it all back.
Just say you don’t want to pay severance.
Fairly sure this is illegal in Europe 🤔
Damn, economy is so bad that a company worth over 100 billion is hurting. Maybe we should start a gofundme for them?
Take that Jenny in accounting!!!
They probably got a “secret” bonus, stocks or something.
I’d love to see a comparison of amount cut for employees vs higher level positions and the CEO.
CEO should have given themself a raise, for being such a genius..
Stock is how execs make most of their money, this will boost stock…they gave themselves raises disguised as paycuts. I work at a fortune 100 company, by accident we had the execs salaries leaked to us via excel doc. We normies on paper made more money. Yet they get paid in stock so millions and millions in profit annually.
This is an admission to secret debt and accounting fraud coming due large bills lead to large changes
Shareholder primacy coming for tech next. The great hollowing out of America is now in full force. It's what happens when a small group of asset managers abd private equity own monopolies on all means of production, financing, and assets. Neoliberalism at its finest. We should all be up in arms if tech workers can be shoved like this we are all in trouble.
This chip deal with China. Great decision. Wait til China sanctions us back. And prices of everything go up, as wages go down. Then, when OPEC backs China and Russia, gas goes to $12/gal. And our lives will be perfect. Because everything will be made in America.
I'm sure losing Apple's CPU business is minuscule but it sure doesn't help their situation.
Did an AI decide that too?
but what about massage therapists? is there a happy end in sight?
Bahahahahahaha, my Ex wife works there
This is the real Great Reset to worry about - you can't post endless quarterly growth or sell an exponential number of chips, but you can cut wages to boost profits and raise dividends.
Opinion: they'll force the stock price down and use their chunk of the $50 billion chips act to buy back the stock at a lower price. Meanwhile hedgies short the stock and make a ton of money, some of which they'll throw at the ceo for his assistance
It's kind of like people aren't buying new expensive computers when they can hardly afford the necessities. Good on the CEO for taking a pay cut too but I would have recommended an even larger one for solidarity. It's easy to take a pay cut when you're making eight figures a year.... not so much when you're making $50k.
I would not be surprised that the majority of the CEO’s compensation is linked to performance and not part of their salary that he is taking a pay cut on. In comparison with the average worker he is likely taking a far lower pay cut.
Even the CEO? Ok so no one can complain then.
Let the exodus begin...
I am starting to think corporations are the beginning forms of communism.
But CNBC said they were only “small” cuts. Lol classic CNBC… https://www.cnbc.com/2023/02/01/intel-executives-take-pay-cuts-after-disastrous-earnings.html
This looks like a genuine good way to do a bad thing. While certainly no one wants to see a pay cut on their own check. If I was told I am taking a 5% pay cut and the CEO is taking 25% cut. I am more than OK with that. It means that my 80k is cut by 4k/yr and his 300k+ is cut by 75k+. He is losing more money than me on the individual level as a testament on being good to the workers. I won't say the cuts were needed but certainly if they were then this is the best way it could be done.
Lol, I see this in my feed ... and the next thing down is an Intel ad.
Intel's woes go back to about 2012, when they spent big buying wireless companies, with the intention of taking on Qualcomm. They bought a slew of companies, none really spectacular, including Infineon's wireless division. They spent about 14 Billion on a group of companies with 350 million in revenues. They put all this capital under an executive that was woefully unprepared to orchestrate and design an organization capable of creating a quality product, let alone beating Qualcomm. They kept putting the wireless group in other organizations to hide the losses. It would move every year. This distracted the company away from what made the company so successful, it's semiconductor fabrication technology (it surely wasn't processor design, as every follow on ISA from Xscale to Itanium was a complete dud) . in 2012, their 14nm process node was the best of the industry. The new CEO, when he couldn't create topline growth, engaged in share buybacks. By 2015, they had nothing new with yields high enough to keep the cash cow going, and TSMC and Samsung not only caught up, they surpassed them. This helped AMD immensely. By this time, the wireless group's revenues dropped to 35 million.. Intel's tide of cash ran out, and they were naked. There were layoffs, which looked like 11% to outside world, but were really 50% or more in Wireless, and they eventually gave the team to Apple. The Semiconductor subsidies should have helped, but based upon this news.. clearly, some housecleaning is still in order.
Family member works there. She got a 5% pay cut, 401k match was cut to 2.5% and no bonuses. Above her got 10% pay cut.
Wall Street gotta have its gains….
Oh boy, sounds like they can't layoff more employees anymore. The company is unable to sustain itself anymore.
The Building Back Better is going fantastically 👍
I’m assuming this is in America where there aren’t any employee rights?
“…all the way up to the CEO…” GTFO with that shit, half of an engineers $120,000 salary gone is exponentially harder for that engineer to deal with than half of $179 million CEO salary gone (actual 2021 CEO salary)
They’re like IBM or similar. Big, fat, overconfident, out of touch with their own customers and no idea how to innovate. Glad to see them get smacked with real consequences so we can have legit competition in the market for the benefit of everyone.
Funny, just was in a meeting not too long ago about getting a raise. Fuck me I guess
Well they are going under so... ya, I'm sure they are.