Intel is cutting about 12,000 jobs or 11% of its work force worldwide and is giving severance and health benefits to many U.S. workers beyond what the typical laid-off employee receives. Former workers are qualified for up to a year of health coverage.
Severance terms offered by Intel
Last month, 784 of Intel’s workers in Oregon were laid off, and hundreds more are expected to follow through buyouts and early retirement. At that facility, the workers who were notified that they would be laid off will stay on the payroll until May 31. The chip maker had 19,500 Oregon employees before the lay-offs began.
In a notice covering the mass layoffs that was filed with the state, the chip maker said each worker will get a minimum of six weeks of pay, plus three months of health insurance. Also the departing employees will get additional health insurance coverage, additional severance pay based on the number years of service, and six months of career transition if they agree to a “standard release agreement.”
Electron Capital returned 3.1% for October, bringing its year-to-date return to 8.3%. The MSCI ACWI gained 6% for October, raising its year-to-date return to -22.3%, while the S&P 500 returned 8% in October for a year-to-date loss of 18.8%. The MSCI World Utilities Index was up 2.7% for October but remains down 13.5% year to Read More
The Oregonian newspaper reported that the laid-off U.S. employees sign the release, they will get a choice of six months of health insurance premiums plus $9,000 or one full year of premiums. Also for departing employees with 30 or more years of service, the pay will range from 4 weeks’ pay for two years or less up to 48 weeks of pay.
What are the norms?
Under a federal law known as COBRA, employers are required to allow the laid-off employees to continue to use their health insurance coverage for up to 18 months or more, but most of the former employees will not get much benefit and will have to pay the associated monthly premiums on their own. According to a survey by the society for Human Resource Management, only 13% of employers have a standard policy to reimburse COBRA premiums completely.
An Intel spokesman confirmed the accuracy and truthfulness of the Oregon filing, but he declined to speak further on the subject.
Intel has major U.S. manufacturing operations in New Mexico, Oregon, Arizona and Massachusetts. In April, the chip maker revealed plans to cut 12,000 workers by mid-2017 as it consolidates operations to reduce costs. Since the announcement, Intel’s share price has declined almost 5%.
On Wednesday, Intel shares closed down 0.27% at $30.06. Year to date, the stock is down by over 14%, while in the last year, it is down by over 8%. The stock has a 52-week low of $24.87 and a 52-week high of $35.59.