American chipmaker Onsemi has announced a restructuring plan that will result in approximately 2,400 job cuts across all business divisions globally this year.
In a filing, the company said the restructuring plan approved by management includes cost-cutting measures intended to adjust onsemi’s expenses in response to current business conditions, while maintaining progress toward its long-term financial goals.
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The company has initiated the plan and expects to incur charges of $50m to $60m related to the layoffs, with most of these costs expected to be recorded within the current year.
Once completed, the layoffs are projected to generate annual savings of $105m to $115m.
As of 31 December 2024, Onsemi employed around 26,400 full-time workers and around 90 part-time and temporary staff across 33 countries.
The job cuts represent a reduction of about 9% of its workforce as the company scales back its manufacturing operations.
Onsemi has been impacted by a slowdown in the automotive sector, driven by rising vehicle prices that have reduced consumer demand. The automotive market accounts for approximately half of the company’s revenue, the Wall Street Journal reported.
The company reported a 15% decline in fourth-quarter 2024 revenue, which fell to $1.72bn.
Despite the restructuring, CEO Hassane El-Khoury stated that research and development would not be affected. Instead, the company is planning to pause certain expansion projects.
“We’re reducing projects that don’t impact the fundamentals of the company; don’t impact the future of the company,” El-Khoury added.
In June 2024, Onsemi announced plans to invest up to $2bn (Kč46.3bn) to establish a silicon carbide semiconductor manufacturing facility in the Czech Republic.
The investment aims to meet the growing semiconductor demands fuelled by electrification, renewable energy, and AI.
