Microchip Technology to Lay Off 2,000 Employees Amid Declining Chip Demand
Microchip Technology (MCHP), a leading American chip manufacturer, has announced plans to lay off approximately 2,000 employees, representing 9% of its total workforce. The decision comes as automobile companies' demand for chips has decreased, leading the company to restructure. Following the announcement, Microchip's stock price rose by nearly 4% on Monday, according to Reuters.
During the pandemic, automobile companies ramped up their chip inventories, but now they are struggling to sell them. Microchip's stock value has dropped by over 36% in 2024.
The company has also revealed plans to sell its integrated circuit die to a Chinese partner, which will test and assemble them for sale under a Chinese brand.
The main layoffs will take place at the company’s factories in Gresham, Oregon, and Colorado Springs, along with the closure of a facility in Arizona. Additionally, layoffs will occur at the company’s back-end manufacturing facility in the Philippines.
These layoffs and restructuring are expected to reduce the company's annual expenses by $90 to $100 million.
