Never seen a company so intent on killing itself.
Intel Cuts Employee Pay to Maintain Quarterly Dividend
21–30 of 293 posts
Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend
#22When bailed out banks paid bonuses it was understandably unpopular, but there was a certain logic that retaining talent optimized performance of the remaining bank, and therefore it was ultimately in the interest of taxpayers. It seems surprising that Intel either doesn't think that retaining top talent is in the interest of shareholders, or thinks that investors aren't able to understand the investment. I would assu…
This is very plausible. Dividends are silly in a world where you can achieve the same result and save everyone 20% tax by doing stock buybacks instead. It's also silly to strongly differentiate between dividend paying stocks and non dividend paying stocks as opposed to focusing on the business' cash flow, unless you're purposely avoiding dividend paying stocks because they suck from a tax perspective. Yet, dividends…
Once upon a time dividend payments were _the reason_ to hold stock in companies. Funny that tax loop holes and the borrowing-against-assets-infinite-money-cheat rendered dividends "silly".
Yes this is a shit situation for Intel, but public companies should be paying dividends, IMO.
Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend
#23When bailed out banks paid bonuses it was understandably unpopular, but there was a certain logic that retaining talent optimized performance of the remaining bank, and therefore it was ultimately in the interest of taxpayers. It seems surprising that Intel either doesn't think that retaining top talent is in the interest of shareholders, or thinks that investors aren't able to understand the investment. I would assu…
Or Intel has found cover from other tech shops to 'do the necessary' and prune the dead wood. It's about time the C level began to look at employee performance and contribution to profits or losses.
This is the opposite of trimming dead wood. Cutting pay is basically guaranteed to drive the most motivated employees away.
Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend
#24When bailed out banks paid bonuses it was understandably unpopular, but there was a certain logic that retaining talent optimized performance of the remaining bank, and therefore it was ultimately in the interest of taxpayers. It seems surprising that Intel either doesn't think that retaining top talent is in the interest of shareholders, or thinks that investors aren't able to understand the investment. I would assu…
I don’t know who is invested in Intel that's betting on anything but a high risk high reward underdog story comeback. Intel already was undercompensating to the point of driving the talent out of their company to begin with. These wage cuts are a sign for investors to flee faster because management lacks coherence. Management seems to be betting on a strategy of promising the world to gain government subsidies while…
I wonder if they just became terminally risk averse.
The thing that made them big is pretty obvious: high-margin premium priced x86 CPUs, which is a position they were able to hold for decades due both to manufacturing excellence and being able to shepherd the standard. They simply can't do it anymore-- execution has stumbled, and the market for x86 is gradually weakening, especially in spaces outside the cut-throat, lower margin, consumer/corporate desktop "it must run Windows and my line-of-business software/Call of Skyrim" vortex.
They could have been using decades of margin to build and consolidate positions in other segments of the market, just to be sure that the next clever new device comes out with an Intel chip, even if it's non-x86. They didn't.
Rather than, say, taking the ARM licenses they ended up flogging and building a competitive mobile CPU on their leading process, they invented weird Atom chips that ended up in like 3 phones.
Okay, flash is huge now, but it's a low margin game maybe not worth their investment. But they chucked out Optane, which still had some possibility as a "halo product" and for some commercial price-is-no-object markets.
It remains to see how sticky Arc graphics will be; they got a boost by the tight market conditions last year where people would grudgingly take any card they could afford. Will people come back to them out of explicit preference? I also wonder if the Larrabee/Xeon Phi adventure set them back or ahead-- trying to make a GPU architecture out of x86 was an interesting take on "GPUs are hard to program", but did it yield a lot of useful knowledge?
Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend
#25Its amazing how quickly we went from semiconductor glut to all chipmakers guiding down, and now this.
Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend
#26Pay cuts are better than layoffs. That said, investors need to take a paycut in dividends as well.
Layoffs is how to get rid of your worst workers, pay cut is how to get rid of you best.
As pithy two edged maxims go, that is dull and chipped on both sides.
Recent layoffs have indiscriminately targeted talent and pay cuts deter those that are primarily driven by returns.
Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend
#27Earlier quoted context omitted.
Layoffs is how to get rid of your worst workers, pay cut is how to get rid of you best.
As pithy two edged maxims go, that is dull and chipped on both sides. Recent layoffs have indiscriminately targeted talent and pay cuts deter those that are primarily driven by returns.
Agreed. In my defense, I was responding to a pretty dull comment.
Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend
#28Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend
#29The article doesn't actually substantiate the claim that the cuts are being made to maintain the dividend. The article does claim, through unnamed sources, that the pay cuts are real.
But if history is any guide, the dividend cuts are also coming.
The current yield is over 5%, which is higher than any duration of US Treasury. This should be a pretty low bar, but over the last 30 years isn't. When company dividend yields approach this threshold, something often gives.
https://www.nasdaq.com/market-activity/stocks/intc/dividend-...
It's also worth noting that as late as a few weeks ago there were several articles swearing up and down that there's no way Intel will cut its dividend. That's looking more ridiculous by the day.
Re: Intel Cuts Employee Pay to Maintain Quarterly Dividend
#30Pay cuts are better than layoffs. That said, investors need to take a paycut in dividends as well.
Intel already had layoffs - it's almost periodic at this point.