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Google parent Alphabet to cut 12,000 jobs, citing 'economic reality’ in latest big tech layoffs (msn.com)

12,000....ouch.

11.5+ % of the work force (roughly)

  • Google has 139,995 employees.
  • 40% of Google employees are women, while 60% are men.
  • The most common ethnicity at Google is White (50%).
  • 18% of Google employees are Hispanic or Latino.
  • 18% of Google employees are Asian.
  • The average employee at Google makes $140,774 per year.
  • Google employees are most likely to be members of the democratic party.

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Recession coming. Higher interest rates out front should have told you. Cost more to borrow money for expanding/building more products. So companies stop expanding and instead contract.
 

First industry to get hit is technology because people will cut out luxury tech items before consumer stapes like food

Amazon, Google, Microsoft, etc all have announced cuts

 

 

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are we gonna start a new thread for every tech firm culling their bloated workforce? The article you linked stated that the layoffs represent 6% of their workforce. Their last quarterly report shows they had 186K employees, which represented a 25% increase from a year ago. 

image.png.bacb6c36d482ea4600ef3a446d524c5e.png

 

Edited by Blotto
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7 hours ago, Blotto said:

are we gonna start a new thread for every tech firm culling their bloated workforce? The article you linked stated that the layoffs represent 6% of their workforce. Their last quarterly report shows they had 186K employees, which represented a 25% increase from a year ago. 

image.png.bacb6c36d482ea4600ef3a446d524c5e.png

 

I had the same reaction.  It seems like companies have been hoarding tech talent for the past ~18 months and now things are rebalancing.  It's not just these tech giants, but large banks and automotive firms have been stocking up on people, probably other industries I'm not exposed to as well.  Hopefully things are calming down and the talent pool will stabilize.

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1 hour ago, fuggled said:

I had the same reaction.  It seems like companies have been hoarding tech talent for the past ~18 months and now things are rebalancing.  It's not just these tech giants, but large banks and automotive firms have been stocking up on people, probably other industries I'm not exposed to as well.  Hopefully things are calming down and the talent pool will stabilize.

image.jpeg.aaaf3d56c33b65831a88adc352d45036.jpeg
 

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My wife works for Google-sounds like mid-management had zero input on who was terminated and it wasn’t just the under-performers.  
 

The stock is up 5%, though, which is probably an indication of the audience for the cuts.  

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I've read some decent analysis or ideas about what Google (and others) are doing. Perhaps they're semi-following a Twitter model of dropping expensive employees but will retain the same revenue. Obviously Elon and Twitter only did the first half of that.

Another interesting take is that Google is now far from being an innovative, ultra-high growth company. For many of their service lines, they're a mature company that only needs to maintain what they've got. Why pay the median (median not average) employee $300K per year.

Even after these cuts, their headcount is still larger than it was a year ago. They and other tech giants just hired too many expensive employees in recent years. I applaud anyone that earns a high salary and has a cush job but you can't expect that forever. Not to mention the few that are simultaneously and secretively working multiple jobs. The music stops eventually.

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https://www.axios.com/2023/01/24/justice-department-google-antitrust-lawsuit

Quote

The Justice Department and eight states on Tuesday filed an antitrust lawsuit against Google's parent company Alphabet, accusing the tech giant of illegally abusing its dominance in digital advertising and violating the Sherman Antitrust Act.

Why it matters: It's the second major antitrust lawsuit filed against Google by the Justice Department in the last three years, and if successful it could force Google sell off much of its ad business.

The DOJ and a coalition of state attorneys general sued Google in 2020 for allegedly using anticompetitive tactics to illegally monopolize the online search and search advertising markets. That lawsuit is ongoing.

Details: "Competition in the ad tech space is broken, for reasons that were neither accidental nor inevitable," the filing reads. "One industry behemoth, Google, has corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers, and brokers, to facilitate digital advertising."

I'm sure we'll all be better off when GOOG ends up paying a $5M fine in about 10 years. 

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45 minutes ago, Blotto said:

https://www.axios.com/2023/01/24/justice-department-google-antitrust-lawsuit

I'm sure we'll all be better off when GOOG ends up paying a $5M fine in about 10 years. 

Yeah, they’re shaking. 
 

Quote

pic748.png
Well this week, Attorney General Janet Reno charged software giant Microsoft with trying to monopolize access to the internet, and has asked a federal court to fine the company a million dollars per day. Analysts say that, at this rate, Microsoft CEO Bill Gates will be broke just ten years after the Earth crashes into the sun.

 

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3 hours ago, Nice Guy Eddie said:

I've read some decent analysis or ideas about what Google (and others) are doing. Perhaps they're semi-following a Twitter model of dropping expensive employees but will retain the same revenue. Obviously Elon and Twitter only did the first half of that.

Another interesting take is that Google is now far from being an innovative, ultra-high growth company. For many of their service lines, they're a mature company that only needs to maintain what they've got. Why pay the median (median not average) employee $300K per year.

Even after these cuts, their headcount is still larger than it was a year ago. They and other tech giants just hired too many expensive employees in recent years. I applaud anyone that earns a high salary and has a cush job but you can't expect that forever. Not to mention the few that are simultaneously and secretively working multiple jobs. The music stops eventually.

From WSJ:

Quote

From its fiscal year-end in September 2019 to September 2022, Apple’s workforce grew by about 20% to approximately 164,000 full-time employees.

Meanwhile, over roughly the same period, the employee count at Amazon doubled, Microsoft’s rose 53%, Google parent Alphabet Inc.’s increased 57% and Facebook owner Meta’s ballooned 94%…On Friday, Alphabet became the latest tech company to announce widespread layoffs, with a plan to eliminate roughly 12,000 jobs, the company’s largest-ever round of job cuts. Alphabet’s cut follows a wave of large layoffs at Amazon, Microsoft and Meta. The tech industry has seen more than 200,000 layoffs since the start of 2022, according to Layoffs.fyi, a website that tracks cuts in the sector as they surface in media reports and company releases.

And then this is a further interesting read which is grounded in Apple to date NOT having layoffs (though Apple is widely "expected to next month to report its first quarterly sales decline in more than three years." -WSJ) and I've highlighted the pertinent Google piece.

"The popular narrative right now about these layoffs is that tech companies dramatically over-hired during the pandemic, but while that seems to have happened with Amazon — and for arguably very good reasons given the way that e-commerce shot up during lockdowns in particular — the reality is that the rest of the tech companies largely increased at the same rate they always had. Sure, the number of employees they added was large, but that was a function of keeping the same hiring rate off of an ever increasing base.

The one exception is 2022, but I think I already put my finger on the reason for that increase while talking about Google’s Q3 2022 earnings:

That leaves headcount growth: despite the fact that Google promised a slowdown in hiring, the company still managed to add 10,165 new employees last quarter (excluding the Mandiant acquisition). That’s actually an acceleration from Q2’s 10,108 new employees. Indeed, one wonders if Google overestimated how many employees would leave during the quarter: at this point Google would certainly seem to be a safe harbor, at least until/unless the company starts active layoffs. I don’t think it’s necessary — the business is doing better than these results suggest at first glance — but one wonders if management may see an opportunity to trim when few will blame them for it.

In short, no one was giving up a job at one of the big five tech companies this year as fear spread about a broad-based slowdown in hiring; I have certainly heard this anecdotally. These companies, though, adjusted more slowly to the slower rate of attrition, which means they accidentally increased their headcount — that’s the theory anyways. And, to the extent that theory is right, the relatively limited size of the layoffs to date actually reflects that: these companies are not returning to their pre-pandemic levels of employees, but rather to where they would be had they kept up roughly the same rates of hiring this year that they have over the last ten.

In short, I don’t see any real indication that this spat of layoffs, at least amongst the big five, is anything other than an opportunistic cull of headcount that (1) gives investors what they want while (2) keeping the exact same sort of strategic priorities and planned employee count the exact same it was a year ago. That may be imprudent: Meta in particular should have probably cut more given the impact on their business of ATT in particular, but for now there simply isn’t much evidence that these companies over-hired or that they are truly changing anything about their employee strategy.

That noted, Apple does deserve credit for whatever combination of discipline and employee retention that led them to avoid the 2022 employee glut that affected their competitors. Indeed, what makes the company’s China dependency so maddening is how phenomenally well-managed every other aspect of their operation is."

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Hiring ahead of your attrition rate was a big deal over the last decade in tech. While cutting certain departments down to the most efficient head count (fewest) they could manage to get the job done, it quickly became apparent that you couldn’t stay on top of your work as soon as you had attrition. And while cutting cost is good for the stock holders on the surface, not getting development, support or implemented on schedule is bad for retaining clients and revenue. As a result workforce management runs numbers to anticipate hiring needs relative to workload and attrition rates so that they can keep running lean without falling too far behind in their business needs.

If it take 3 months to get someone fully trained up then you’re typically 3 months behind (not to mention the front-loaded lag time from recruiting, HR, new hire orientation, etc). When you hear slowing down hiring, it typically means they are adjust those numbers due to lower than expected attrition. If I hired two new devs in Q3 in anticipation that 2 would leave between Q4/Q1 and none have left, then slowing down hiring is completely normal and almost a nonevent as the team is now sitting heavy in headcount (which also makes it ripe for layoffs, either cutting underperformers or high cost employees that no longer justify the salary).

This is only noteworthy because it’s happening at scale across the industry and now the talent market (which has been bereft of talent recently) is now flooded with a few hundred thousand new applicants.

I’d only get concerned if we see another round of layoffs later this year at this same scale. The market correction is good for the business and recent events have given just about every company a free pass to recalibrate their talent. I feel for anyone that was affect by this but on the bright side if tech keeps growing most of these people will find new jobs within a few months.

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9 hours ago, TKthunder2 said:

Hiring ahead of your attrition rate was a big deal over the last decade in tech. While cutting certain departments down to the most efficient head count (fewest) they could manage to get the job done, it quickly became apparent that you couldn’t stay on top of your work as soon as you had attrition. And while cutting cost is good for the stock holders on the surface, not getting development, support or implemented on schedule is bad for retaining clients and revenue. As a result workforce management runs numbers to anticipate hiring needs relative to workload and attrition rates so that they can keep running lean without falling too far behind in their business needs.

If it take 3 months to get someone fully trained up then you’re typically 3 months behind (not to mention the front-loaded lag time from recruiting, HR, new hire orientation, etc). When you hear slowing down hiring, it typically means they are adjust those numbers due to lower than expected attrition. If I hired two new devs in Q3 in anticipation that 2 would leave between Q4/Q1 and none have left, then slowing down hiring is completely normal and almost a nonevent as the team is now sitting heavy in headcount (which also makes it ripe for layoffs, either cutting underperformers or high cost employees that no longer justify the salary).

This is only noteworthy because it’s happening at scale across the industry and now the talent market (which has been bereft of talent recently) is now flooded with a few hundred thousand new applicants.

I’d only get concerned if we see another round of layoffs later this year at this same scale. The market correction is good for the business and recent events have given just about every company a free pass to recalibrate their talent. I feel for anyone that was affect by this but on the bright side if tech keeps growing most of these people will find new jobs within a few months.

Great post and I'll just add two things to the discussion:

1) to the bold, as mentioned Apple will announce it's first negative growth period in a while, Microsoft today reported it's weakest growth in 6 years (2% YoY), Salesforce, Google, everyone is citing a slowing economy and growth for tech. I think it's too soon to know and this summer will tell the tale, but for now I don't think you can assume hypergrowth in tech.

2) there is an interesting, if a bit out there, theory that tech is just playing a game of mimicking each other and enjoying the 5% stock bump (short term). The Atlantic’s Derek Thompson doesn’t rule it out, writing that one explanation for the layoffs could be tech CEOs mimicking each other to get a brief high from the market. https://www.theatlantic.com/newsletters/archive/2023/01/what-the-tech-and-media-layoffs-are-really-telling-us-about-the-economy/672791/

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6 minutes ago, HamsterHookah said:

Great post and I'll just add two things to the discussion:

1) to the bold, as mentioned Apple will announce it's first negative growth period in a while, Microsoft today reported it's weakest growth in 6 years (2% YoY), Salesforce, Google, everyone is citing a slowing economy and growth for tech. I think it's too soon to know and this summer will tell the tale, but for now I don't think you can assume hypergrowth in tech.

2) there is an interesting, if a bit out there, theory that tech is just playing a game of mimicking each other and enjoying the 5% stock bump (short term). The Atlantic’s Derek Thompson doesn’t rule it out, writing that one explanation for the layoffs could be tech CEOs mimicking each other to get a brief high from the market. https://www.theatlantic.com/newsletters/archive/2023/01/what-the-tech-and-media-layoffs-are-really-telling-us-about-the-economy/672791/

This is exactly what is happening. When growth slows in a down cycle and you are a behemoth making fuck loads of money you hire to keep anyone from ever competing or innovating again. What is happening here is a bunch of activist investors getting involved with companies that are public wanting them to hit some metrics they have defined even though they don't know shit about tech. 

Right now these companies aren't growing because they lack innovation and they are entirely stagnant with their product set and consumers are not looking to spend money for the sake of spending money anymore. 

Look at Apple and their move to their own silicon. Brilliant then they plateau hard because the big difference was actually moving to ARM and putting your own shit on the SOC not because Apple actually knows how to do silicon. Now the M2 is iterative at best and no one gives a shit about slightly better. They didn't fix any of the x86_64 compatibility outside of their hokey ass emulation and that would have been a huge win. Apple does a lot of things right but they really fucked this one up for the long term success. Betting that you are better at silicon than Intel is a big fucking bet. 

I see this as a terrific opportunity for people to start innovative companies and get acquired really quickly relative to normal time and/or for a challenger to really go after the giant even harder while their guard is down. 

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2 minutes ago, immamac said:

This is exactly what is happening. When growth slows in a down cycle and you are a behemoth making fuck loads of money you hire to keep anyone from ever competing or innovating again. What is happening here is a bunch of activist investors getting involved with companies that are public wanting them to hit some metrics they have defined even though they don't know shit about tech. 

Right now these companies aren't growing because they lack innovation and they are entirely stagnant with their product set and consumers are not looking to spend money for the sake of spending money anymore. 

Look at Apple and their move to their own silicon. Brilliant then they plateau hard because the big difference was actually moving to ARM and putting your own shit on the SOC not because Apple actually knows how to do silicon. Now the M2 is iterative at best and no one gives a shit about slightly better. They didn't fix any of the x86_64 compatibility outside of their hokey ass emulation and that would have been a huge win. Apple does a lot of things right but they really fucked this one up for the long term success. Betting that you are better at silicon than Intel is a big fucking bet. 

I see this as a terrific opportunity for people to start innovative companies and get acquired really quickly relative to normal time and/or for a challenger to really go after the giant even harder while their guard is down. 

100% agree with the bold and I think it's been proven time and time again that recessions/bear-markets birth a lot of the unicorns and eventual winners in their categories years later. The founder of Okta's interview years ago has stuck with me in that way where he credited to being started in 2008-2009 recession as the only reason they were successful. I'll have to find it and post it for entertainment sake if anyone is into getting their jollies by reading about this kind of stuff like I am.

That said, I think there is a lot of shareholder value to be had at some of these big techs and activist investors are right to buy a material % of the business and advocate for change (and thus enriching themselves when the price goes up). Salesforce has something like 4 activist investors right now. Disney is fending off one, and will probably end up winning that one. GE just divested, Honeywell divested before due to activism and has been better for it. The list goes on. 

An interesting one to watch right now is Gutuam Adani getting pestered by the same activist investors who blew the whistle on Nikola (EVs) who got their CEO in criminal trouble.

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And since this might be a catchall thread for Google, there is a discussion to be had that is more existential to Google's existence than a small layoff. The DOJ trying to dismantle them and unwind some of the M&A that made them a monopoly. From the DOJ's suing them and their complaint:

Competition in the ad tech space is broken, for reasons that were neither accidental nor inevitable. One industry behemoth, Google, has corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers, and brokers, to facilitate digital advertising. Having inserted itself into all aspects of the digital advertising marketplace, Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies.

Google’s plan has been simple but effective: (1) neutralize or eliminate ad tech competitors, actual or potential, through a series of acquisitions; and (2) wield its dominance across digital advertising markets to force more publishers and advertisers to use its products while disrupting their ability to use competing products effectively. Whenever Google’s customers and competitors responded with innovation that threatened Google’s stranglehold over any one of these ad tech tools, Google’s anticompetitive response has been swift and effective. Each time a threat has emerged, Google has used its market power in one or more of these ad tech tools to quash the threat. The result: Google’s plan for durable, industry-wide dominance has succeeded…

By deploying opaque rules that benefit itself and harm rivals, Google has wielded its power across the ad tech industry to dictate how digital advertising is sold, and the very terms on which its rivals can compete. Google abuses its monopoly power to disadvantage website publishers and advertisers who dare to use competing ad tech products in a search for higher quality, or lower cost, matches. Google uses its dominion over digital advertising technology to funnel more transactions to its own ad tech products where it extracts inflated fees to line its own pockets at the expense of the advertisers and publishers it purportedly serves.

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59 minutes ago, StassneyHorn said:

Anecdotal, but I’ve had 3 different recruiters reach out for the same contract Data Analyst position at Google’s Austin site. Similar thing happened with Meta after they announced layoffs.

 

Do you know if these are publicly posted job or ones only sent to external recruiters? Normally companies with large layoffs cool it somewhat with public job postings. Or at least only post critical openings.

 

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1 hour ago, immamac said:

This is exactly what is happening. When growth slows in a down cycle and you are a behemoth making fuck loads of money you hire to keep anyone from ever competing or innovating again. What is happening here is a bunch of activist investors getting involved with companies that are public wanting them to hit some metrics they have defined even though they don't know shit about tech. 

Right now these companies aren't growing because they lack innovation and they are entirely stagnant with their product set and consumers are not looking to spend money for the sake of spending money anymore. 

Look at Apple and their move to their own silicon. Brilliant then they plateau hard because the big difference was actually moving to ARM and putting your own shit on the SOC not because Apple actually knows how to do silicon. Now the M2 is iterative at best and no one gives a shit about slightly better. They didn't fix any of the x86_64 compatibility outside of their hokey ass emulation and that would have been a huge win. Apple does a lot of things right but they really fucked this one up for the long term success. Betting that you are better at silicon than Intel is a big fucking bet. 

 

Theres been no investor-activism at these companies. 

They’re cutting because changing macroeconomics and some of peer effect from playing in the same ballpark Why pay handsomely to retain talent when the competition for that talent is diminished? 

Apple moving to their own chip architecture *was* exactly the move for long term success. They saw a deficiency/need in the component, executed a big capital project to address it, gained a huge lead in performance, and now M2 and every iteration is pushing that lead further. 

That has not to do with external/investor pressure, and why would you expect a change of that scale every year? Thats neither needed nor realistic nor present in any other industry or product. 

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At it's core Google is a search engine.  There's a new player in town that they can't just bully or buy: tik tok

Tik Tok the new search engine

Quote

TikTok’s rise as a discovery tool is part of a broader transformation in digital search. While Google remains the world’s dominant search engine, people are turning to Amazon to search for products, Instagram to stay updated on trends and Snapchat’s Snap Maps to find local businesses. As the digital world continues growing, the universe of ways to find information in it is expanding.

Google has noticed TikTok edging into its domain. While the Silicon Valley company disputed that young people were using TikTok as a replacement for its search engine, at least one Google executive has publicly remarked on the rival video app’s search capabilities.

 

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On 1/25/2023 at 11:08 AM, immamac said:

Betting that you are better at silicon than Intel is a big fucking bet. 

In the past that was true.  Intel today is a behemoth in decline.

TSMC ran right past them on process technology, to the point where I think it is a national security issue.
Intel continues to see the world through an x86 window, and the world has moved on to ARM and later will move to RISC-V.

Intel is going to lose the client business (laptops) to ARM and probably eventually the data center too.  They will go down trying to sell x86 version N+1 as long as they can.  Apple did the right thing by moving on.

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On 1/25/2023 at 11:08 AM, immamac said:

Betting that you are better at silicon than Intel is a big fucking bet. 

 

6 hours ago, Texas Jeff said:

In the past that was true.  Intel today is a behemoth in decline.

TSMC ran right past them on process technology, to the point where I think it is a national security issue.
Intel continues to see the world through an x86 window, and the world has moved on to ARM and later will move to RISC-V.

Intel is going to lose the client business (laptops) to ARM and probably eventually the data center too.  They will go down trying to sell x86 version N+1 as long as they can.  Apple did the right thing by moving on.

Intel is in a free fall man.

Quote

 

Intel Corp. is forecasting one of the worst quarters in its history, touching off a broader selloff of chips companies as a slowdown in personal-computer sales ravages the industry. Late Thursday, Intel gave a sales range that missed analysts’ estimates by billions of dollars, warning that revenue could fall to the lowest quarterly level since 2010. Shares plunged 10%, the most since July, in New York. Advanced Micro Devices Inc., Applied Materials Inc., Lam Research Corp. and Qualcomm Inc. declined. Semiconductor maker KLA Corp., which issued its own disappointing outlook, also slid.

Chip companies are reeling over a steep decline in demand for PC processors that has wiped out profits and led to deep cuts across the industry. Intel’s outlook signals more pain to come. The company is eliminating jobs and slowing spending on new plants in an effort to save as much as $10 billion. It’s taking an especially large hit from losing market share to rivals…

It was a painful admission for a company that has been attempting a multiyear comeback under Chief Executive Officer Pat Gelsinger, who took the helm in 2021. A post-pandemic downturn for Intel’s main business, PC chips, has torpedoed efforts to get the company’s financial performance back on course. Instead, it’s only losing more ground. “I’d like to remind everyone that we’re on a multiyear journey,” Gelsinger said during a conference call.

 

And at the risk of turning Google thread into an Intel thread, but I know @TwiceHorn will appreciate the topic:

Quote

 

The biggest driver was exploding usage in the data center; yes, Intel missed out on mobile, but mobile computing is intertwined with cloud computing, and Intel was the chief beneficiary of the parallel growth in the latter.

The trouble with missing mobile was threefold: first, Intel missed out on the massive volumes that would, in the long run, be important for paying off ever more expensive fabs; instead those volumes went to TSMC. Second, TSMC, fueled by the massive revenue influx that came from delivering those volumes, accelerated its march down the process curve, beating Intel by years to the very expensive and very risky EUV transition that allowed TSMC to leap ahead in performance. Third, mobile was, by necessity, at the forefront of prioritizing efficiency and performance-per-watt given the limitations of mobile devices. Today, though, efficiency and power-per-watt increasingly matter for servers, as well.

The net result is that today it is AMD, the second supplier IBM insisted on way back at the dawn of the PC era, that makes the best data center chips thanks in part to TSMC’s process advantage, even as data center demand has slowed dramatically in the inevitable-yet-late-to-arrive semiconductor downturn we are currently experiencing, and as data center operators like AWS invest in their own ARM-based chips; Intel, meanwhile, still provides a lot of volume in PCs — thanks in part to very aggressive discounting — but the pandemic pulled forward huge amounts of PC buying: that worked to Intel’s benefit in 2020 and 2021, but now the hangover is hitting and it is a doozy.

Intel’s Plunging Margin

This has resulted in a triple-whammy to Intel’s earnings:

First, volumes were down dramatically thanks to high inventories amongst OEMs (a less charitable interpretation is that Intel stuffed the channel).

Second, prices are down thanks to Intel needing to increasingly discount to counter AMD’s total-cost-of-ownership advantage.

Third, the largest cost of goods sold for a chip is fixed costs, the depreciation of which is incurred no matter how many chips are sold; that means that fewer chips sold for lower prices has an outsized impact on gross margins.

Indeed, Intel’s gross margins were a shocking-for-Intel 39%

 

 

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Wow, this is insane @TwiceHorn

Hot off the presses, we have confirmation from multiple employees that Intel is cutting costs tremendously at the expense of their employees. These cuts are broad-based, with employees having their compensation affected. Quarterly pay bonuses are gone, annual bonuses are being paused, 401k match is halved from 5% to 2.5%, merit-based raises are suspended, and there is a pay cut to all employees’ base salary based on grade.

All employees below Principal Engineer, grades 7 to 11, will get a 5% cut, 10% cuts will be instituted for VPs, and the executive leadership team will take a 15% cut, with Pat Gelsinger taking a 25% cut. These cuts hurt even more when we are in an inflationary environment. These cost cuts are, of course, dwarfed by their quarterly dividend, of course, which we have been clamoring for them to cut for over a year.

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7 hours ago, HamsterHookah said:

Wow, this is insane @TwiceHorn

Hot off the presses, we have confirmation from multiple employees that Intel is cutting costs tremendously at the expense of their employees. These cuts are broad-based, with employees having their compensation affected. Quarterly pay bonuses are gone, annual bonuses are being paused, 401k match is halved from 5% to 2.5%, merit-based raises are suspended, and there is a pay cut to all employees’ base salary based on grade.

All employees below Principal Engineer, grades 7 to 11, will get a 5% cut, 10% cuts will be instituted for VPs, and the executive leadership team will take a 15% cut, with Pat Gelsinger taking a 25% cut. These cuts hurt even more when we are in an inflationary environment. These cost cuts are, of course, dwarfed by their quarterly dividend, of course, which we have been clamoring for them to cut for over a year.

It appears that after decades of dominance, processors have become more or less a commodity outside the system-on-a-chip thing.

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