Intel lays off hundreds of tech administrators

It's generally assumed that the first round of layoffs, if small, is to cull underperformers. Further rounds seem to make everybody jumpy.

Any study telling you that lump sum investing beats dollar cost averaging was only able to use a 30 year period of unprecedented and unreplicated global growth

DCA + Dividend Reinvesting + Covered Calls + a few years = Cost Basis of basically $0

Generally speaking, I agree with that. Tax breaks lead to a race-to-the-bottom. The "winning" location gives away so much that it's often a negative for the municipality. This may well have been the situation with the recent proposed HQ for Amazon in NYC.

However, there are exceptions. I don't know the exact details of the "massive tax breaks" you are referring to. But they could be justified in this case. Otherwise the investment would simply go to another state.

Here's now it has worked in Oregon with Intel in the past: The tax breaks were because of the extraordinary high cost of a semiconductor fab. It costs literally billions of dollars to build and equip a modern fab. This cost is far out of proportion to what a more mundane industrial development would cost. Assessing a property tax on the full value of that fab would mean the amount of tax is far far far out of proportion to the cost of providing government services to that fab.

So lets say, making up some numbers, a municipality has an existing property tax base of $5 billion. Intel builds a new $5 billion fab there. The burden of that fab on resources such as fire and schools is minimal. So, does everyone else in the municipality get their property taxes cut in half just because the expensive new building appears? Or does the municipality now get 2x the previous revenue (which whey will most likely spend recklessly).

The same argument as property taxes can be made for income taxes on the business. Let's say a company can build a widget factory for $5 billion. The widgets from that factory can generate a profit of $1 billion per year, at very little cost to the municipality or the state. Should the state collect income tax on that full $1 billion of profit?

If you say yes, collect the full amount of property or income tax, then the factory just gets built elsewhere. Maybe even in another country. In that scenario, the USA loses and the state loses. They lose the high paying jobs that the factory brings. They lose all the "trickle down" that the factory brings. They simply lose.

Dont forget, all the new local employees buy homes, pay property taxes, pay state income taxes, pay capital gains taxes on all the appreciated Intel stock they sell. In Oregon, unlike at the Federal level, there is no tax reduction for long term capital gains and there is no tax reduction for dividends. The income tax rate hits 9% at $8,401 in income.

Oregon gets plenty of money at the 9% state income tax rate that most people easily hit. Oregon takes 9.9% above $125,000 but that's not a big added burden for most people.

Semiconductor fabs are so very capital intensive that I think adjustments must be made to the general method of taxing both property and income.

But when you look at cost of capital equipment per job created, there's a difference of several orders of magnitude between Acme widget manufacturing and a semiconductor fab. The semiconductor fab does not fit the model on which the tax rates are based. It's an outlier. Tax breaks to bring their costs back in line with the "typical" business are perfectly reasonable if you want them to bring the jobs.

Finally, in Intel's case, let's assume "hundreds" of employees means 500. That's 0.5% of their total worldwide workforce. Does that justify increasing their property tax costs by several orders of magnitude (canceling the tax breaks)?

Intel has a lot of 1-off databases for internal tools used in manufacturing. The database sees a lot of heavy use, but is tied to one particular step in manufacturing, so there aren't a lot of traditional users.

I suspect that they've migrated these databases to versions that don't require as much heavy oversight.

[1] https://en.wikipedia.org/wiki/Systems_engineering

See this for example https://www.indeed.com/jobs?q="Technical+Adminstrator"&from=... or https://www.indeed.com/jobs?q=%22Tech+Adminstrator%22&l=

In a big company, you’ll find a little team in charge of Lexmark printers or something similar.

Jobs like that are an endangered species as cloud and even minimally useful automation root.

It drives me a little crazy inside when I go to clients and see their system administrators have never developed automation for routine "small" events and are still after N years (where sometimes N>10!) responding to the same disk full alerts in exactly the same way, with absolutely zero automation of what they learned, cleaning up the same selection of files, and so on. And this is before I try to extol the virtues of devops over lunches, or go tactical and encourage them to try out Terraform, Pulumi, or the like (MEGO is my usual audience reaction). Fortunately my clients don't pay me to transform their IT, so it's no skin off my back.

But make no mistake, that change is building a powerful head of steam, and I'm excited to work on automation solutions that embrace these principles, tooling, culture, etc., in my own service offerings for another part of my business. The folks who are resisting this change though, are not going to react well if/when the change starts seeping into their worlds.