Microchip To Lay Off 2000 People

Microchip is to lay off 2,000 people representing 9% of its workforce because of weak automotive demand.

In December of last year the company said it was closing its Arizona fab in Q3 2025 which would cause 500 job losses and save $90 million a year in costs. The closure has now been brought forward to May.

The current reductions will hit Microchip’s fabs in Gresham, Oregon and Colorado Springs and its backend operation in the Philippines. Savings from the cuts will amount to about $25 million a year.

Costs of between $30 million and $40 million relating to severance payments and restructuring will be incurred.

Microchip will also have to pay about $45 million for modifications and cancellations of foundry contracts.

CEO Steve Sanghi, who was Microchip’s CEO for 30 years  before handing over to Ganesh Moorthy in 2021, took over from Moorthy in November last year.