$100M in savings not enough to justify Intel’s coffee cut

The jokes about Intel’s decision to cut — and then reinstate — free coffee and tea at its offices aren’t expected to disappear anytime soon. However, recent reports have added fresh context to the matter, revealing that the cost-cutting move was projected to save the company $100 million. While Intel has faced mounting financial pressure and continues to target substantial savings, the backlash over coffee proved to be a breaking point, ultimately forcing the tech giant to partially backtrack on its austerity plans.

Check out all Intel related articles

The initial decision to cut complimentary coffee, tea, and fruit in Intel’s offices came as part of a sweeping cost-reduction effort amid company-wide layoffs and benefit adjustments aimed at saving millions. Employees who arrived to find empty kitchenettes and notices of the change quickly voiced their dissatisfaction, underscoring the value that even minor perks can hold in workplace culture. The ensuing discontent highlighted a broader tension between Intel’s drive to curb expenses and its need to maintain employee morale.

Intel California office.

Following the backlash, Intel restored coffee and tea service in response to employee concerns, though free fruit will remain off the table. In a statement posted on its internal Circuit messaging platform, Intel addressed the reversal, acknowledging the importance of “small comforts” in the workplace. “Although Intel still faces cost challenges, we understand that small comforts play a significant role in our daily routines,” the company stated. “We know this is a small step, but we hope it is a meaningful one in supporting our workplace culture.”

This episode is the latest in a series of contentious cost-cutting measures at Intel. Recently, Intel also reinstated its car benefit program with modifications, transitioning employees from company-leased vehicles to a car allowance model intended to achieve savings while partially preserving the benefit. The update, announced in a memo by Intel’s Chief People Officer Christy Pambianchi, was framed as a compromise, balancing fiscal prudence with employee sentiment.

Intel’s financial restructuring follows an August announcement that the company would eliminate 15,000 positions globally, amounting to around 15% of its workforce. The cutbacks have impacted hundreds of roles in Israel, amplifying discontent as the company recalibrates both pay and perks.

While the reinstatement of free coffee and tea may seem a small concession, the incident underscores a broader challenge for Intel. For now, restoring this small but symbolic perk has served as a gesture to employees, though Intel’s cost-cutting efforts remain a work in progress. The question remains whether other “small comforts” will follow suit in Intel’s efforts to strike a balance between fiscal discipline and maintaining a positive workplace culture.