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Comment by olliej | Hacker News Reader

Uhh, they also cut comp for all the rank and file employees, but did not cut the dividends they issue (that disproportionately benefit executive class employees). Cutting the dividends would save much more money than shitting on their employees, but the goal is to ensure any cuts are restricted to things that don't really impact executives, board, etc - even if the long term costs are much worse.

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The first thing Pat wanted to do when he arrived at Intel was to cut dividends. But He cant. End of Story.

The dividend yield is now over 5%; how is it possible that they can't give it even a symbolic little cut? If anyone has snark-free information about this story I'd love to hear it.

Given the CHIPS Act too-important-to-fail backstop Intel has, this almost seems like risk free money.

That would just reinforce the stock price death spiral that is being artificially propped up by the high dividend.

What I'm really wondering about is how Intel can afford to build all the factories that government subsidies are being given out around the world. Getting a subsidy on construction and even operating costs can't defray the cost of operating those factories if there are no orders for the product coming out of them. Building a foundry up to the scale of TSMC takes decades, and Intel is not a trusted foundry partner. Just look at what happened with prior Intel foundry attempts with customers like Achronix.

They should've cut the dividend long ago.

They've fallen way too far behind to start cutting resources aggressively... restructuring makes sense, but burning all your best workers is going to be counterproductive in this case

If they cut dividends they get kicked out of a multitude of basket goods retirement products which will absolutely bomb the living fuck out of the stock price and send them on an even worse death spiral.

I wonder how Intel employees getting stock options would feel about having the price drop another 50%.

They’re going to be forced to cut it in the end anyway, waiting years to do it makes it all the worse.

They have the cashflow to cover any R&D and capital investment without the need to depend on equity financing

So? Intels stock price dropping does not impact intel’s revenue, its expenses, or in fact any part of running the company at all.

Also eventually the cost of losing all your good people, and failing to keep up with the rest of the industry will mean that 5% dividend is 5% of much less actual income.

That's absolutely not at all how it works. If you tank your stock price you tank your ability to raise funds which tanks your debt. Your stock price is absolutely important to running your company.

I'd be interested in seeing the banks that say "we will give you a loan on the basis of your artificially inflated stock price, that is maintained by you giving out more dividends than you can afford at the cost of your long term revenue potential" vs "we will give you a loan on the basis of your long term ability to repay that debt".

If on the other hand you mean "raising funds" by selling stock in the company, then obviously you need that stock to be valuable when you actually need to raise the funds, except intel is only able to maintain its present stock price by destroying it's future revenue potential. e.g. its stock _only_ has short term value at the moment because of over paying dividends, if it needs to "raise funds" it means it no longer has the cash for the BS dividend so its stock will be worthless then.

Maintaining a dividend yield to enable fund raising, only makes sense if maintaining said yield doesn't require directly destroying the true value of the stock.

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