OnSemis restructuring plan to cut 2,400 jobs

On Semiconductor Corp., a power and sensing chip company, has recently announced a restructuring plan that involves cutting approximately 2,400 jobs, which accounts for about 9 percent of its workforce in 2025. This move comes as no surprise, as the company had hinted at "streamlining its business" earlier in the month when revealing its financial results for the fourth quarter of 2024 and the full year. OnSemi reported a decline in revenue for 2024, dropping to US$7.08 billion from US$8.25 billion in 2023, with net income also decreasing from US$2.18 billion to US$1.57 billion.

The restructuring initiated by OnSemi is company-wide and is expected to impact all business groups, including the worldwide manufacturing organization. While the job cuts are projected to result in charges of between US$50 million and US$60 million, the company anticipates generating savings of US$105 million to US$115 million on an annualized basis once the restructuring is completed.

OnSemi is not alone in facing challenges within the chip industry, particularly in sectors like automotive and industrial, which have experienced sales contractions and a bleak outlook for the first quarter of 2025. Other chip companies, such as NXP Semiconductor and STMicroelectronics, are also implementing cost-saving measures, including significant job cuts, to navigate the current market conditions.

The semiconductor industry has been navigating through turbulent times, with companies like On Semiconductor Corp. having to make tough decisions to adapt to the changing landscape. The restructuring plan, while aimed at improving efficiency and reducing costs, reflects the broader challenges faced by chip manufacturers in a competitive and evolving market.

Despite the short-term impact of the restructuring, OnSemi remains optimistic about the long-term benefits it will bring. By aligning its operations with current market demands and optimizing its resources, the company aims to emerge stronger and more resilient in the face of industry headwinds, positioning itself for sustainable growth and success in the future.