Microchip Technology plans to reduce its workforce by 2,000 employees, constituting 9% of its total staff, in response to declining demand from automakers. The Arizona-based semiconductor company is addressing sluggish demand from automotive clients who are grappling with chip inventory management.
Microchip plans job cuts at fabs in Gresham, Oregon and Colorado Springs, affecting production. Layoffs are also set for the manufacturing plant in the Philippines, costing between $30 million and $40 million in cash severance and restructuring expenses.
Microchip Technology will lay off employees and halt operations at its Arizona plants in May, earlier than planned. These moves aim to cut the company’s annual operating costs by $90-100 million. Last December, the company had projected $90 million in yearly cash savings from shutting down the Arizona fab.
Microchip Technology expects approximately $45 million in charges due to ending or altering long-term supply contracts with wafer foundries. Layoffs will affect different business units and support groups, but details on specific segments are not disclosed.
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