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https://semiwiki.com/semiconductor-services/294637-2020-was-a-mess-for-intel/ https://semiwiki.com/semiconductor-services/294637-2020-was-... >A few years ago,

https://semiwiki.com/semiconductor-services/294637-2020-was-a-mess-for-intel/ https://semiwiki.com/semiconductor-services/294637-2020-was-... >A few years ago, back in 2016, Intel did a “RIF” (reduction in force) of about 11%. Intel had previously done a significant reduction way back in 2006 of about 10% >In an industry that runs on “tribal knowledge” and “copy exact” and experience of how to run a very, very complex multi billion dollar fab, much of the most experienced, best talent walked out the doors at Intel’s behest, with years of knowledge in their collective heads bottom line: Intel created the hole by itself and jump into that deep end.

nikanj 6y ago
Management rule of thumb: For every % you cut from the bottom, you lose from the top. Cut 10% of workforce, and 10% of your best people say "yes" to the next headhunter trying to poach them.
- belval 6y ago
  It's actually more complex than that, when a big company wants to reduce workforce they will fire the bottom and offer retirement packages to their oldest employees which are above or near retirement age, sometime as much as a full year of salary. The intuition is that older employees cost more and by cutting them you can reduce your payroll more significantly while doing what looks like smaller employee cuts from the outside. This is often viewed favourably by investors because on paper it doesn't seem as the company is stalling (head count is still high, costs are down). The obvious issue is that these older employees are not easily replaceable and you end up losing more velocity in the long run than originally anticipated. The above is more applicable to traditional blue-chip businesses where workforce movements are more limited. For software engineering (which Intel is not really) your assumption is correct and once cuts are announced a lot of your great engineers will jump ship.
  - bluGill 6y ago
    Those older employees better be replaceable! Many will be gone in a few more years because they retire anyway, so you should have a plan in place to save their knowledge. The above applies to everyone. When I was an intern the company folklore was full of horror stories because the last guy knew anything about a very profitable product died suddenly. (the product was for mainframes: clearly near end of life, but it was still mission critical for major customers and got had to get minor updates) I've also known important people to find a better job. Even when an offer of more money gets them to stay, my experience is they always wonder if they made the right decision and so are never again as good as they were before. Moral of the story: don't allow anyone in your company to get irreplaceable. This is good for you too: it means you won't stagnate doing the same thing over an over.
    - belval 6y ago
      I would venture that this is indeed how these exec rationalize the whole process. No one should be irreplaceable and therefore the move make sense. Even though management bashing is trendy these days, most managers/execs know these things and are not the idiots we satirize them to be. Even Swan is probably not an idiot, he simply expected everyone to struggle as much as Intel on the 7/10nm node and when TSMC just breezed past Intel and AMD came out with a much better product than anticipated he found himself in very hot water. (He could also be quite the idiot, I don't know him)
    - Mountain_Skies 6y ago
      The vendor of one of the security scanning tools we had subscribed to for the past six years told us they were shutting down the product because the PM left and no one else in the company wanted to take it over. I don't know how many SEs and other resources they had on the product but it was a major part of their offerings. They didn't even have an alternate upsale (or downsale for that matter) to offer us. So strange one person leaving could collapse an entire revenue stream like that.
  - foobiekr 6y ago
    I work (but not for much longer) for a tech company that has done an ER package twice (and is well known for layoffs). The result is that the company has a sort of corporate alzheimers. It knows the inventory of all the things it used to know, but doesn't actually seem able to recall anything. The trajectory and outlook are not good. I don't think tech companies can afford this practice. So much knowledge resides in their senior talent, and the hard-won experience-based understanding and things gleaned through opportunistic exposure that they seem to voluntarily surrender.
graton 6y ago
Plus Intel for many years has paid slightly above average wages. If I recall correctly they targeted paying at about 55-60 percentile. The problem with that is that the FAANG companies will literally pay their engineers twice that. Many of the competent people I knew at Intel have left (not all), while many of the incompetent people I knew are still there.
- deleted 6y ago
  [deleted]

nikanj 6y ago

Management rule of thumb: For every % you cut from the bottom, you lose from the top. Cut 10% of workforce, and 10% of your best people say "yes" to the next headhunter trying to poach them.

belval 6y ago
It's actually more complex than that, when a big company wants to reduce workforce they will fire the bottom and offer retirement packages to their oldest employees which are above or near retirement age, sometime as much as a full year of salary. The intuition is that older employees cost more and by cutting them you can reduce your payroll more significantly while doing what looks like smaller employee cuts from the outside. This is often viewed favourably by investors because on paper it doesn't seem as the company is stalling (head count is still high, costs are down). The obvious issue is that these older employees are not easily replaceable and you end up losing more velocity in the long run than originally anticipated. The above is more applicable to traditional blue-chip businesses where workforce movements are more limited. For software engineering (which Intel is not really) your assumption is correct and once cuts are announced a lot of your great engineers will jump ship.
- bluGill 6y ago
  Those older employees better be replaceable! Many will be gone in a few more years because they retire anyway, so you should have a plan in place to save their knowledge. The above applies to everyone. When I was an intern the company folklore was full of horror stories because the last guy knew anything about a very profitable product died suddenly. (the product was for mainframes: clearly near end of life, but it was still mission critical for major customers and got had to get minor updates) I've also known important people to find a better job. Even when an offer of more money gets them to stay, my experience is they always wonder if they made the right decision and so are never again as good as they were before. Moral of the story: don't allow anyone in your company to get irreplaceable. This is good for you too: it means you won't stagnate doing the same thing over an over.
  - belval 6y ago
    I would venture that this is indeed how these exec rationalize the whole process. No one should be irreplaceable and therefore the move make sense. Even though management bashing is trendy these days, most managers/execs know these things and are not the idiots we satirize them to be. Even Swan is probably not an idiot, he simply expected everyone to struggle as much as Intel on the 7/10nm node and when TSMC just breezed past Intel and AMD came out with a much better product than anticipated he found himself in very hot water. (He could also be quite the idiot, I don't know him)
  - Mountain_Skies 6y ago
    The vendor of one of the security scanning tools we had subscribed to for the past six years told us they were shutting down the product because the PM left and no one else in the company wanted to take it over. I don't know how many SEs and other resources they had on the product but it was a major part of their offerings. They didn't even have an alternate upsale (or downsale for that matter) to offer us. So strange one person leaving could collapse an entire revenue stream like that.
- foobiekr 6y ago
  I work (but not for much longer) for a tech company that has done an ER package twice (and is well known for layoffs). The result is that the company has a sort of corporate alzheimers. It knows the inventory of all the things it used to know, but doesn't actually seem able to recall anything. The trajectory and outlook are not good. I don't think tech companies can afford this practice. So much knowledge resides in their senior talent, and the hard-won experience-based understanding and things gleaned through opportunistic exposure that they seem to voluntarily surrender.

graton 6y ago

Plus Intel for many years has paid slightly above average wages. If I recall correctly they targeted paying at about 55-60 percentile. The problem with that is that the FAANG companies will literally pay their engineers twice that. Many of the competent people I knew at Intel have left (not all), while many of the incompetent people I knew are still there.

deleted 6y ago
[deleted]