onsemi to reduce workforce by 2,400 in worldwide reorganization
onsemi has recently announced significant changes with a global restructuring plan that will impact all of its business units, including manufacturing operations worldwide. The primary goal of this move is to reduce costs, enhance financial efficiency, and align the company’s spending with current market conditions while still making progress towards its long-term growth strategy.
As part of this restructuring effort, onsemi is planning to lay off around 2,400 employees on a global scale. These job cuts are expected to be completed by the end of 2025, taking into account local labor laws and regulations. According to a filing with the Securities and Exchange Commission (SEC), the restructuring is projected to incur costs ranging from USD 50 million to USD 60 million, covering severance, benefits, payroll taxes, and other associated expenses. The majority of these fees will be accounted for throughout the year 2025.
Despite the immediate expenses, onsemi anticipates annual savings of USD 105 million to USD 115 million once the restructuring plan is fully implemented. Nevertheless, the company has warned that these projections are subject to change, and unforeseen circumstances related to the restructuring may lead to additional costs.
This decision to downsize and cut costs comes at a time when the semiconductor industry is grappling with fluctuating demand, supply chain disruptions, and economic uncertainties. onsemi reported a decline in revenue in the fourth quarter of 2024, with total revenue for the year amounting to USD 7.08 billion, down from USD 8.25 billion in 2023. Net income also saw a decrease, from USD 2.18 billion in 2023 to USD 1.57 billion in 2024.
The restructuring actions taken by onsemi are reflective of a larger trend within the semiconductor sector, where companies are adjusting their workforce and operational strategies to remain competitive in an ever-changing market landscape. Notable players in the industry, such as NXP and STMicroelectronics, are also reported to be reducing their staff numbers in response to market challenges. Furthermore, various semiconductor fabrication projects have encountered delays or cancellations, underlining the difficulties faced by companies in scaling operations and managing costs amid global economic instabilities.
In conclusion, onsemi’s decision to restructure its operations and workforce is a strategic move aimed at enhancing financial performance, aligning with market conditions, and positioning the company for long-term growth. This announcement is part of a broader trend within the semiconductor industry where companies are adapting to remain competitive amidst evolving market dynamics.