Intel’s Layoffs: What Will Happen to the Older Workers?

Intel is about to layoff 12,000 people. This is a company with an enormous amount of intellectual horsepower within its folds. Many with very serious intellectual merit will be out.

The semiconductor industry has shrunk, and there aren’t many employers who can absorb that many highly qualified people.

Last summer, Intel had a layoff, although significantly smaller. Intel has a lot of employees in Oregon, and the cuts impacted that state dramatically. Mike Rogoway (@rogoway) at the Oregon Live did some investigative journalism that highlighted the fact that older employees were let go more easily:

Proportionately, employees in their 50s were three times more likely to lose their jobs than workers in their 30s, according to a document obtained by The Oregonian/OregonLive that tallies every Intel employee in the United States. The company was nearly five times more likely to lay off workers in their 60s than those in their 30s.

“Looking at the impact, in this case only, it clearly has disproportionately affected older workers,” said Portland employment attorney Matthew C. Ellis. But he said that’s not necessarily illegal, nor is it unusual.

Mass layoffs tend to skew older, according to Ellis. Older workers tend to cost more because they’ve accumulated years of raises, and in theory those raises reflect accumulated experience.

In practice, though, the skill sets an employer needs may have changed – or a company may see eliminating older workers with larger salaries as the most expedient way to reduce costs.

This means, soon, thousands of highly skilled, gifted, intellectually capable, technically savvy professionals in their forties and fifties will be out on street with nowhere to go.

This is a very depressing thought.

I recently wrote an answer to a Quora question that I would like to invoke here: What CEOs of tech companies could do when layoffs are inevitable?

There are several issues at hand here:

(a) Who should stay?

(b) How should the ones who need to be let go be dealt with in a human, constructive, motivating way?

On (a), internal performance appraisals and managers’ knowledge of their performance and motivation levels should provide at least a reasonable level of screening to identify the obvious set of keepers.

The ones that are in the middle – without clear accomplishments, but also not obvious that they need to be let go – could use a round of additional screening criteria / process.

On (b), offering training is one of the best ways to ease the pain.

Here’s a creative way to play your next lay-off:

You could offer to all of your employees a month of subscription to this Basic Curriculum for tech entrepreneurs which is designed to stimulate creative, entrepreneurial thinking for serious tech ventures. You could propose that all employees use this Curriculum to generate innovative strategies on how to add to the company’s bottom line at this critical time.

The employees with self-discipline and interesting ideas will identify themselves through this process, including the ones you think are on the fence. They should be offered to stay, and most likely, would be happy to do so, armed with new energy and motivation.

However, for some employees, it might be, indeed, the right time to go out and strike on their own. This process will also bubble some of those up, and make the screening process easy.

The ones who have to go, have now been given training on how to start something on their own, and as part of their lay-off package, you could give them another 3-6 months of subscription to the curriculum, in case they have genuinely expressed a desire to pursue entrepreneurship. At any rate, they will have much less resentment towards the employer because instead of cutting them lose with no hope, you are actually showing them another way to become successful.

Since layoffs are inevitable, and some of the employees will have to be let go, this methodology could help some of them prepare for considering entrepreneurship as their next career choice. This way, if they are laid off, they will have more choices, more opportunities.