Intel has seemingly offered thousands of its staff in Ireland the opportunity to take a lengthy spell of unpaid leave. According to reports, up to 2,000 of the 5,000 staff at Intel’s Leixlip campus have been presented with the option of three months unpaid leave. This Irish news comes hot on the heels of Intel worldwide layoff plans, announced back in October. Intel says the unpaid leave option is being presented as it is keen to retain talented staff.
The unpaid leave approach is going to help Intel with its long-term growth by retaining talent, yet paring costs, reasoned Intel in a statement. “Voluntary time off programs allow us an opportunity to reduce short term costs and offer employees attractive time off options,” said Intel in a statement seen by RTE. "Manufacturing talent represents an important element of our business here in Ireland."
Irish Minister for Foreign Affairs Simon Coveney said that he has been assured by a senior Intel exec that Intel remains committed to Ireland, and that he believes that the current spate of cost cutting is a “short-term measure,” on a long term investment path. Indeed, with a rosier long-term future in mind, Intel announced back in March that it had spent $5B on commissioning a new Intel 4 (AKA Intel 7nm) fabrication plant at the site in Leixlip, with a further $12B spending earmarked for preparing the fab until the end of 2023. It also recently confirmed sizable investments in mainland Europe and the US.
The slowdown in the PCs and semiconductor industry is a well established trend in H2 2022. Many companies, including Intel, have already published financials which highlight the need to reduce costs. However, the cyclical nature of the semiconductor industry is well known, and cutting too deep could mean that a company may be ill-prepared for the next boom. As long as a company has got the resources, it makes sense to cut back where possible without going too far and impacting the ability to bounce back.
We don’t have the precise details of the three months unpaid leave option. Aspects such as the timing of the leave period are therefore unknown, for example. Also, we can’t say that Intel’s Irish business will be immune from layoffs, and the take-up of voluntary unpaid leave options might have an impact on subsequent employee-focussed announcements. Whatever the case, Intel Ireland is looking to make savings to contribute to the company’s global plan to reduce costs by $10B per annum globally by 2025. Moreover, at the time of writing it looks like Intel has decided to focus on making personnel savings, while continuing to spend big on industrial assets.