Intel offers workers severance packages
Published: 03 May 2001 10:27 BST
Although Intel is still aiming to reduce its work force through attrition, the company has begun to offer workers severance packages to speed the process.
The chipmaker has authorised managers to offer workers pay packages to leave the company, spokesman Chuck Mulloy confirmed. In April, Intel also began to encourage some graduating students to not accept job offers extended earlier by Intel, Mulloy confirmed. The grads were offered a signing bonus and two months of pay for not showing up.
The compensation packages are all part of an effort, announced in March, to reduce the number of employees by 5,000. Approximately 1,100 positions will be eliminated through the closure of a plant in Puerto Rico, according to Mulloy.
The company had hoped to accomplish most of the remaining 3,900 cuts through normal attrition. Attrition is taking its toll, but the slowing economy has crimped the ordinary pace of job hopping, thus prompting Intel to stimulate the process.
"If it weren't for the slowing economy, natural turnover would take care of it," Mulloy said.
In 1998, Intel wanted to eliminate 3,000 employees from a total of 65,000 through natural attrition. Eventually, the company resorted to voluntary severance packages. At the end of 2000, the company employed 86,000.
Mulloy further emphasised that the pay packages were voluntary. College students who are being encouraged to look for work elsewhere can still come to work. However, there is no guarantee that they will get the job they were hired for. Many of these students will be put in the redeployment pool.
Voluntary retirement packages are offered to workers in boon times too. Under one formula, certain employees are offered retirement packages when their age plus years of service at the company total 75.
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