Thread regarding Intel Corp. layoffs

@1wrt lots of bean counter experience going out the door

Package is gonna be pretty small. Hopefully you can get a new job fast. IRS is hiring and has about the same amount of bureaucracy as Intel.

In earnings conf call CFO mentioned that restructuring charges in next quarter will be similar to this quarter around $670 million. Based on that package will be really great around average $70k. For two quarters total charges are around 1.5B which is similar to 2014 great VSP.

@izh Which sites will close? Make a prediction for Q4 2023.

My guess is that the number might be somewhere around 10-13K.

Just a guess.

Yes good points. So we are pretty much in the same ballpark. It very well could be that the layoffs are spread over several quarters and other actions result in restructuring charges. Good analysis. I got a job for you on Wall Street if you are looking.

I dont think that 3600 is going to be the total number of people to go. I think we will see 3600 this quarter and 9000 - 11000 in the next 2 quarters. Also, in the all hands CP mentioned optimizing intel sites. I assume this is corporate speak for site closures

Oh yes one more way to triangulate to my number. Intel is saying they will save $3B in costs in 2023. In 2016, the cost savings was only $1.8 Billion for the 15,000 HC reduction (plus other savings unrelated). So, unless there are going to be massive cost reductions other then headcount in 2023, you have certainly got to expect more then 3,600 layoffs.

You made a mistake. Remember that restructuring charges includes other categories besides severance pay. In 2016, the company shut down some locations and had other restructuring charges unrelated to severance.

When you do the calculations for 2016 based only on the severance restructuring you get to the 15,000 number so, it all checked out. You can find the data in Intel financial statements form 10 Q and 10 K from 2016 and 2017.

According to 2016 Q1,Q2,Q3 financial reports Intel spent a total of 2 billion on restructuring. I'm not sure why it was so expensive but if we apply the same ratio of cost to head count reduction then Intel will fire ~3600 this quarter. Also, the second quarter of layoffs in 2016 was 4 times larger than the first

Using averages is not perfect. the exec severance packages can be 20x the average. On the other hand, don't forget we have lots of low level grunt workers making far less then $127,000.

If you have any evidence that this round of layoffs will disproportionally hit senior management please tell. I will believe it when I see it. Usually not always, Intel uses peanut butter cuts across the board plus a few obvious dog businesses or pet projects.

Twitter laid off their 3 top execs and had to pay them $200M total for severance. I'd imagine the layoff at Intel to be more top heavy. I think the average salary you used is too low and the actual number of employees impacted is going to be closer to 10k than 20k.

@heh+1jtPAlmy you tried 'fact checking' by searching Intel page for 'severance' and 607? That won't work. The Op said it was a note to the financial statements. So, you go Intel page and open the latest Form 10-K and read note 5.

Here is the link:

https://www.intc.com/filings-reports/all-sec-filings/content/0000050863-22-000038/intc-20221001.htm

Note 5 : Restructuring and Other Charges

Three Months Ended Nine Months Ended
(In Millions) Oct 1, 2022 Sep 25, 2021 Oct 1, 2022 Sep 25, 2021
Employee severance and benefit arrangements $ 607 $ 21 $ 650 $ 43
Litigation charges and other 4 16 (1,199) 2,267
Asset impairment charges 53 5 89 287
Total restructuring and other charges $ 664 $ 42 $ (460) $ 2,597

In the third quarter of 2022, the 2022 Restructuring Program was approved to rebalance our workforce and operations to create efficiencies and improve our product execution in alignment with our IDM 2.0 strategy. Restructuring charges are recorded as Corporate charges in the "all other" category presented in Note 2: Operating Segments within Notes to Consolidated Condensed Financial Statements and are primarily comprised of employee severance and benefits arrangements. As of October 1, 2022 we recorded $537 million as a current liability within Accrued compensation and benefits on the Consolidated Condensed Balance Sheets. We expect these actions to be substantially completed by the end of the first half of 2023, but they are subject to change. Any changes to the estimates or timing of executing the 2022 Restructuring Program will be reflected in our future results of operations.
Litigation charges and other includes a $1.2 billion benefit in the first nine months of 2022 from the annulled penalty related to an EC fine that was recorded and paid in 2009, and a charge of $2.2 billion in the first nine months of 2021 related to the VLSI litigation. These were recorded as a Corporate benefit and charge in the "all other" category presented in "Note 2: Operating Segments" within Notes to Consolidated Condensed Financial Statements. Refer to "Note 12: Commitments and Contingencies" within Notes to Consolidated Condensed Financial Statements for further information on legal proceedings related to the EC fine and the VLSI litigation.
Asset impairment charges includes $237 million of goodwill and other impairments related to the shutdown in the first nine months of 2021 of two of our non-strategic businesses, the results of which are included in the “all other” category presented in “Note 2: Operating Segments” within Notes to Consolidated Condensed Financial Statements.

I think HR made it clear already that the severance package will vary depending on your worksite (state, country,..etc).

In CA, CO, MA for example, by law you will get cash out for your unused sabbatical & vacations which can be up to 16 weeks total for some employees. Also, most likely they will give you some time per year of services (2016 ACT was 1.2 -1.4 weeks per years of service).

Sure, the straight math used by the OP adds up using his assumptions but there is a lot of variables not being consider and hence, hard to use these simple figures to try and determine the total employees affected at the end of the day.

I like the analysis but I also like to do fact checking since the internet is such a reliable place...
Where did you see the $607M for severance? I just searched https://www.intc.com/news-events/press-releases/detail/1586/intel-reports-third-quarter-2022-financial-results for both "severance" and "607". Severance had one hit and the statement it was in didn't have a dollar value associated with it. 607 had zero hits. I also searched the pdf version of the release and got the same results. Both versions were accessed from the investor relations site ww.intc.com.

The News Summary section at the beginning on the earnings release has the statement "Third-quarter results include GAAP restructuring charges of $664 million, reflecting initial cost reduction actions." To me the key word in that statement is "initial".

Since there will be some real cost to restructuring I would assume that the amount going to severance will be less than $664M but I still don't see where $607M was derived.

The big variables in your calculations are the actual weeks of severance and what you include in compensation. $127K average seems low since it needs to include more than just salary. Don't forget healthcare, social security, 401K matching, and stock purchase plan discounts that the company also pays on a per employees basis.

This is the best post of this thread in the last 1 year

@Kobayashi you have pretty big range but I can't see any problem with you math.