Intel shocked employees on Tuesday evening with word that it is sharply cutting employee compensation after reporting miserable financial results last week.

Intel Corp., struggling with a rapid drop in revenue and earnings, is cutting management pay across the company to save cash it needs to invest in a turnaround plan.

Intel’s statements

“As we continue to navigate macroeconomic headwinds and work to reduce costs across the company, we’ve made several adjustments to our 2023 employee compensation and rewards programs,” Intel said in a statement. “These changes are designed to impact our executive population more significantly and will help support the investments and overall workforce needed to accelerate our transformation and achieve our long-term strategy.”

The announcement comes a day after Intel said it was laying off 340 employees at its California campus. The company fired the workers and gave them a 60-day notice period.

Intel spokesperson Addy Burr said the “changes are designed to impact our executive population more significantly and will help support the investments and overall workforce.”

Pat Gelsinger has joined the list of CEOs taking pay cuts. Chief Executive Officer Pat Gelsinger is taking a 25% cut to his base salary, the chipmaker said. His executive leadership team will see their pay packets decrease by 15%. Senior managers will take a 10% reduction, and the compensation for mid-level managers will be cut by 5%.

Hourly workers and employees below the seventh tier in the company’s system won’t be affected.

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