Intel employees to share cash bonus of €8.3m

About 3,300 staff working at Intel Ireland's facilities in Leixlip and Shannon will share a bonus worth about €8.3 million because of the firm's improved performance over the past 12 months, writes Jamie Smyth, Technology Reporter

Details of the employee bonuses emerged yesterday following the publication of Intel's 2003 results this week, which showed that the firm doubled its profit in the fourth quarter to $2.2 billion (€1.8 billion).

The US chip manufacturer confirmed that the average payout due to its technicians from two separate bonus schemes running at the firm would be worth about €2,500 to each staff member.

An Intel spokeswoman said staff were eligible for an average payout worth about 11.8 days salary from the firm's employee cash bonus programme.

This bonus scheme is a type of profit-share arrangement that Intel operates to let its staff share in the success of the company.

Intel employees also participate in a separate Employee Bonus Scheme, which is based on the principle of individual performance. Irish staff will receive an average bonus worth about 2.5 per cent of their salary under this scheme, according to the spokeswoman.

The €8.3 million bonus will be warmly welcomed by Intel staff who have endured a difficult three-year period since mid-2000 when the technology industry went into a sharp downturn.

During this period, Intel introduced a voluntary redundancy scheme and froze wages to cope with the longest and most severe slump in the history of the semiconductor industry.

Early signs of a recovery in the technology industry were seen in January 2003 when Intel's Irish staff received an average bonus worth about €1,000 each.

The new Intel employee bonus confirms recent economic indicators that show demand for electronic goods such as computers and mobile phones is now recovering.

In an interview this week, Intel's chief financial officer, Mr Andy Bryant, said the firm had seen early indications of a return to stronger spending on computers and other technology by corporations, which had been the most uncertain element in the fledgling technology sector recovery.

"What we saw in the fourth quarter was surprising strength, both in North America and western European geographies, which we assume is an early indicator of an increase in IT spending," Mr Bryant said.

Intel reported its highest quarterly revenue for the three months to December 27th, 2003, at $8.74 billion, an increase of 22 per cent on the previous all-time high recorded in 2000. Net income was $2.17 billion, or 33 cents a share, compared with $1.05 billion, or 16 cents a share, in the fourth quarter of 2002.

Intel employs about 3,300 staff at its manufacturing plant in Leixlip and a research centre in Shannon. It will begin full production at a new fabrication plant before June and plans to recruit more staff for the site. An Intel Ireland spokeswoman said that the new plant was undergoing the final phase of installation and qualification of equipment.

Intel also announced this week that it will collaborate with the Government in a new world class research centre at Trinity College Dublin called the Centre for Science, Engineering and Technology (CSET) in Ireland.