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Intel shocked employees Tuesday evening with word that it is sharply cutting employee compensation after reporting miserable financial results last week.

The chipmaker said it will slash base pay for employees above its midlevel ranks by at least 5% effective March 1, according to employees who heard the company’s announcement. Vice presidents will take a 10% cut, more senior executives will receive 15% less, and CEO Pat Gelsinger will get a 25% reduction in his base pay.

Hourly employees and other junior staff, Grade 6 and below in Intel’s ranking system, aren’t getting a pay cut. Annual bonuses will remain for all workers.

But Intel is cutting other incentives for everyone, effective immediately. It has suspended merit raises for all employees, suspended quarterly profit-sharing bonuses and employee recognition programs, and cut 401(k) retirement plan matching payments by half, to 2.5%.

Read More :Oregonlive