The hallways at Intel’s Israel development center are quieter these days, as the largest wave of layoffs the company has ever known comes to an end and those remaining get used to the new reality.
Former Intel Israel employees told Globes that the situation at the chipmaker is a complex one for an organization that is working under pressure and feeling overwhelmed, due to a severe liquidity crisis at its global parent company.
The company’s stock price has fallen by 50% since the beginning of 2024, and the company’s losses rose in the last quarter to $1.6 billion. The global simplification plan, announced by CEO Pat Gelsinger in August, included between 15,000 and 17,000 layoffs worldwide.
At Intel Israel, the country’s largest private employer, layoffs began later than the rest of the world, in the days after the holidays, and amounted to 15% and 20% of the company’s 7,000 development employees in Israel, according to estimates by Intel. Intel Israel. Former employees who spoke to Globes.
These numbers include those who left voluntarily as well as those who were dismissed. A rough estimate places these numbers between 1,000 and 1,400 employees at Intel Israel development centers. The activities of 4,000 employees at the Kiryat Gat production plant were not affected.
This means that the total number of employees at Intel Israel will fall below 10,000 employees, for the first time in a decade. In 2015, the company reported that its headcount exceeded 10,000 employees for the first time, and until recently Intel Israel had 11,000 employees. Now, Intel is similar in size in Israel to Rafael, a state company with 9,500 employees, while Israel Aerospace Industries (IAI), also owned by the government, has 14,000 employees. However, Intel Israel is still larger than Nvidia, which has more than 4,000 employees in Israel, while Microsoft Israel has more than 3,000 employees, and Apple and Google each have more than 2,000 employees in Israel.
Expectations and frustrations
The remaining employees at Intel Israel speak of a long layoff process that takes place without much transparency, causing expectations and frustration that Israelis are not being used at other technology companies, where layoffs are short and sharp. Intel announced the layoffs in August, and the process took place gradually in October and November, and will not be completed until December.
“What disappointed us most was the lack of transparency – we were not told the truth,” a senior employee at the company told Globes. According to him, the current wave of layoffs is the “largest and harshest” ever in Israel. Although he was not directly affected, he says the move also hurt the employees who remained.
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“Many managers knew a month before they were scheduled to be laid off, but were forbidden from saying it. The employee scheduled to be laid off sits with his team, and the manager has to assign him tasks when he knows what is coming — it was very difficult and unpleasant.” He added: “A lot of people have left, good people, at all levels and from almost every administration, people who we will miss later.”
Another employee, who was a software manager at the company’s Haifa headquarters, tells Globes that the layoffs also hurt people with development experience like himself. “There was a variety of people who were fired, some because the projects were closed and some because it was an opportunity for managers to get rid of certain people,” he says. However, he adds that in his opinion overall “the company has been fair with regard to layoffs.”
One of the company’s resident employees tells Globes that while those who have stayed are relieved, “what’s particularly concerning is that upper management seems to keep making crazy, bad decisions.” According to him, the feeling is that the company is not yet stable. “The behavior around the exit from the crisis is very depressing,” he says.
The veterans left voluntarily
It is estimated that the layoffs took place at all of Intel’s development centers in Israel – Haifa, Petah Tikva and Jerusalem, while some projects were affected more than others. Intel tried not to hurt the core processor business, instead choosing to cut projects in wireless and cellular communications and video cards, including those used in artificial intelligence.
Layoff patterns point to an interesting trend: “While many veterans have accepted a voluntary retirement plan, younger people have not been affected much because there is not much benefit to it because they are not highly paid and there is no justification for firing them,” says a former employee who was fired. Unless one of them isn’t working.” He says that with team leaders, closing projects was used as a reason for firing: “When it was the team leader who had half the projects cut, it was used as an excuse. Some of the people who worked on those projects were fired as well.” In the current situation, according to the source, most of those fired have worked in the company for less than 10 years.
Turn on the rental and coffee
The long process of simplification in Israel was also accompanied by frequent changes and deterioration of working conditions. In September, Intel informed development staff in Israel that the company’s car leasing program had been cancelled. Employees with rental cars were required to find alternative transportation solutions, and according to the law, if the change constituted a significant violation of the terms of employment, they had the option to quit. Sources say that canceling the rent cost amounts to about 4,000 shekels in the salaries of some employees.
One of the moves that generated the most media coverage was that Intel decided to close coffee stations in the company’s offices. According to reports, a few weeks ago Intel employees around the world discovered signs one morning announcing that they would no longer be able to get coffee except for a fee. This move, which was made without prior notice, sparked a wave of criticism and received widespread negative feedback and memes on social networks, and in the entire industry.
Intel employees and managers saw the move, although a relatively small financial saving, as a worrying signal about the company’s situation as well as a direct blow to morale. Now, according to reports, Intel has reversed both of its decisions, whether regarding coffee or car rentals. However, new employees will receive offers for private hire that are not funded by Intel, as is the norm at most technology companies today.
Intel responded: “As part of the comprehensive cost reduction plan we announced in August, we are forced to make difficult but necessary decisions. These are difficult decisions to make, and we treat employees with sensitivity and respect. These changes support our efforts.” “A strategy to become a leaner, simpler and more agile company, with the goal of positioning Intel for long-term sustainable growth.”
Published by Globes, Israel Business News – en.globes.co.il – on November 12, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.
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