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When bailed out banks paid bonuses it was understandably unpopular, but there was a certain logic that retaining talent optimized performance of the remaining b
by rz2k 4y ago
When 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 assume that investors who are still invested in Intel were holding out for the prospect that Intel would recover its former glory, but maybe it is mostly investors interested in near term dividend yields, or institutional investors that are sensitive to metrics other than something that is difficult to quantify like narratives or some notion of employee quality.
- sitkack 4y agoIf Intel becomes a pure play foundry, bear with me, then it won't need those employees. It should be training those employees to become silicon designers and verification engineers at their own fabless semiconductors.
- faeriechangling 4y agoI 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 in reality cutting costs and letting the business wither and die and I don’t know if that justifies the valuation.
- hakfoo 4y agoI 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?
- jasonjayr 4y agoThe line-of-business software is quickly turning into a web browser accessing an internal server cluster, and just about any chip can run that nowadays.
- milkshakes 4y agoservers also have chips though
- eric-hu 4y agoYep. And Amazon has gone as far as designing their own data center chip because Intel was selling a lackluster product for the price.
- KMag 4y agoA lot of server workloads also aren't about maximizing flops/Watt or iops/Watt, but rather setting up DMA between the disk controller and the network card and having a low idle power, to get the most network throughput per Watt. A lot of the high-end computation is also about handing off data to the GPU and having a low idle power. It took Intel way too long to get the power consumption on the Atom processors down (not ops/Watt, but total Watts), back when Atom had a chance in the phone market. (A difficult task, which is why I bought ARM Holdings stock shortly after Android came out because I realized (1) nearly everyone was going to soon have a smartphone and (2) whether iPhone or Android won, it was going to be very difficult for Intel to get competitive in the smartphone market fast enough to prevent ossification of the market around ARM. Unfortunately, SoftBank took ARM private and closed out my trade.) Now, the same dynamic of the low-end x86 processor eating its way up the stack to threaten the high-margin mainframe and RISC servers is playing out with low-end ARM eating its way up the stack and displacing a lot of uses for the high-margin x86 server chips.
- reducesuffering 4y ago> Unfortunately, SoftBank took ARM private and closed out my trade. Uh, probably fortunately. Softbank bought ARM for $32b 7 years ago, and fat chance it's worth that inflation-adjusted now.
- idontwantthis 4y agoI invested when they announced their ARC GPUs at the height of the chip shortage. Took them so long to deliver it seems like they lost their chance.
- bloodyplonker22 4y agoUnfortunately, what they delivered was also extremely underwhelming. I expected something that would at least be a mid-range GPU, but they ended up releasing trash tier casual gamer cards. I do not believe that was their intent. AMD and Nvidia are just too competitive today.
- BuyMyBitcoins 4y agoGiven that AMD has been competing with Nvidia for so long and has had so much trouble gaining market share and that they are always competing on price rather than performance, I reckoned that Intel would suffer the same fate with ARC.
- UncleOxidant 4y ago> Intel already was undercompensating to the point of driving the talent out of their company to begin with. Yep. Intel salaries were already on the low side. To some extent they could get away with this in the past because many of their locations were outside of silicon valley in places where there really weren't a lot of (or any) other companies where you could work at the same level. For example, say you worked at their Folsom, CA or Hillsoboro, OR locations - if you were going to change to a different company that pretty much meant you were moving. But now that a larger proportion of jobs are remote that strategy for keeping salaries low isn't going to work.
- tshaddox 4y agoIf you’re predicting a major decline of globalism, then betting on a domestic firm in an extremely economically important sector that is currently extremely reliant on globalism doesn’t sound that crazy.
- faeriechangling 4y agoWhat stops the Americans from simply stealing (or buying) TSMC or Samsung or whatever technology with how deep their fingers are into those companies and starting up fabs as needed? Even if the world "Deglobalizes" overall does that really mean that America maintaining its influence over countries like Taiwan and Japan and South Korea is not an option if the issue is important enough? America also has AMD/Nvidia for the chip design side of the business. Intel could be valuable to America but the problem is the damned word could and it's not essential.
- UncleOxidant 4y agoI had high hopes that Gelsinger would be able to pull it off. But seeing this makes me think that he's getting too much pushback from other factions within Intel and the institutional investors.
- kube-system 4y agoMultinationals have no loyalty to any country anyway. Giving TSMC big tax breaks to build top fabs in the US to make AMD chips is equally as good as having Intel be a success from a national security perspective.
- AYBABTME 4y agoThat's a wishfully pessimistic and cynical point of view. Multinationals are made of people and like people, some of them have more less turncoat attitudes. TSMC would probably not abandon Taiwan, it knows it's essential to its defense.
- kube-system 4y ago
- flangola7 4y agoHow is Intel an underdog next to AMD? I don't know many business machines running AMD.
- insaneirish 4y ago> How is Intel an underdog next to AMD? I don't know many business machines running AMD. I don't know what a "business machine" is, but you probably aren't intimately familiar with organizations that have been directly purchasing large amounts of processors or processor containing devices over the last several years. For many such entities, AMD has made way more sense than Intel.
- flangola7 4y agoI meant workstations, laptops, servers, etc. My org has 1000s of endpoints and 10s of servers across multiple campuses. All of it running Intel.
- damageboy 4y agoThen your org is over paying for mediocre HW, at least for servers, arguably also for laptops (Dev machines for sure) At least for the last two years.
- flangola7 4y agoI can count on one hand the number of devs we have. We're not a software tech company. vPro is a standard for device management here.
- sorry_outta_gas 4y agoIntel has been shitting the bed for a decade+ now
- adgjlsfhk1 4y agonot quite, Haswell was only 9.5 years ago :) fma+avx2 is a pretty nice architecture boost.
- sorry_outta_gas 4y agoInvesting in this giant companies instead of providing funding to spur new ones is just dumb
- elihu 4y agoBuilding a fab is very expensive. It's unlikely for some small new entrant to be successful, unless they happen to invent something better than EUV lithography or can somehow build all their machines from scratch. Basically at this point, the big players are TSMC, Intel, and maybe Samsung. No one else can afford what it costs to be constantly upgrading their factories and doing the necessary basic research to get high quality and consistent yields.
- murbard2 4y agoThis 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 are entrenched in many investor's psyche. Even official regulatory training in the US teaches registered representative that it's a good idea to recommend dividend bearing stocks to people who want "income" from their investments, which is a fallacy. Large mutual funds also have special categories for stocks providing high dividend yields. Sad that this is the strategy as opposed to leveraging the incredible opportunity they have from their fabs.
- candiddevmike 4y agoOnce 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.
- chrisbolt 4y agoIf stock buybacks are more tax-efficient, why are dividends better?
- landemva 4y agoOr 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.
- Retric 4y agoThis is the opposite of trimming dead wood. Cutting pay is basically guaranteed to drive the most motivated employees away.
- landemva 4y agoGood point; maybe this is the least effort way for C level to do something without doing hard work. We will see over next couple years how attrition works out.
- toiletfuneral 4y agoI think it’s cool watching giant companies fumble over and over strategically but see comments applauding cutting workers. Why would you trust their wisdom on this decision? So weird how this country admires the most dogshit performing executives
- blihp 4y agoThe C level is the dead wood at Intel. This is 15+ years of bad management decisions catching up with them.
- kergonath 4y agoEmployee performance is nothing without good leadership and sound strategy. Intel seems to be lacking both, and it’s not the fault of most of the employees getting pay cuts.
- Spooky23 4y agoWhere are they going to go? I’m sure the key people won’t hurt as much, but hardware people are pretty screwed overall. Your mastery of some Intel process has not much value in the market. I worked at a tenant in a well funded facility doing semiconductor manufacturing R&D and prototyping. The nicest cars on that lot belonged to the tradesmen running wire and pipe for the tools. A few execs drove fancy cars in their special lot.
- thaeli 4y agoEspecially since the other market willing to pay for their expertise (China) just got effectively closed off..
- numbsafari 4y agoYeah, it’s not like there’s a ton of new manufacturing capacity building in the US, or an explosion of firms wanting to do custom, in house designs…
- somethoughts 4y agoThis is the challenge with working in the semiconductor industry - you really are captive to <5 employers who have access to the billion dollar fabs and if they are all cutting staff then you have to take what you can get - unlike the SW/SAAS type companies where you just need an AWS account and a really good idea and good sales team. Also it is highly likely TSMC pays much less than Intel's process/fab side of the house and works its process/fab teams a lot harder.
- Regnore 4y agoApple?
- vkou 4y ago> It seems surprising that Intel either doesn't think that retaining top talent is in the interest of shareholders, When everyone around you is laying thousands of people off, your top talent isn't likely to leave you, regardless of what indignities you heap on it.
- kergonath 4y agoBut it destroys loyalty, and they will leave at the first opportunity, which will happen sooner or later. It does not sound good as a longer-term strategy.
- vkou 4y agoEvery employer of note across tech is behaving in pretty much the same manner right now. There's no point holding a grudge over this if the alternative is working at... Anywhere else, that treated its people just as poorly this year. The more plausible risk is people mentally checking out, and not giving much of a crap about their work.
- hedgehog 4y agoI don't know if this report is real but nobody with significant experience dealing with Intel would be surprised if they do choose this particular footgun configuration.
- EVa5I7bHFq9mnYK 4y agoWhat's Intel to do if TSMC top talent costs way less than Intel's top talent? How are they to compete? Even if they cancel all the dividend.
- deleted 4y ago[deleted]
- squokko 4y agoAt a bank, 90% of the people do not have any distinctive talent - the companies just hire Type-A looking people, even regardless of college major. This is in many ways why they work so hard and subject themselves to such indignities -- fundamentally they know it and they know they could be replaced at the drop of a hat.
- coldtea 4y ago>When 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. I don't think optimizing the performance of banks the create trillions of debt and were bailed out trillions of dollars is "in the interest of taxpayers".
- rz2k 4y agoThe US government bailed out banks by effectively purchasing large portions of their assets and tasking the banks with continuing to administer these troubled assets. In the end it worked in that the US eventually was able to sell those assets back at an accounting (though not economic) profit.
- 5350-uiop-1130 4y ago> there was a certain logic that retaining talent optimized performance why do people still think a bunch of coked up degenerates who almost bankrupted the world are "talent".....