Fabs on hold, jobs on the line – welcome to 2025
The first quarter of 2025 has been marked by turbulence in the electronics and semiconductor industry, with waves of layoffs, stalled investments, and shifting trade policies reshaping the landscape. The year began with cautious optimism, but that optimism has quickly faded.
By the end of 2024, the industry was already facing challenges, with both Intel and Bosch announcing major layoffs. Now, just a few months into 2025, job cuts have accelerated, and policy shifts continue to influence corporate strategies. Let’s take a closer look at how the year has unfolded so far.
Microchip Technology recently announced significant cuts, eliminating 2,000 jobs as part of a restructuring plan that will see the accelerated closure of its Tempe, Arizona facility. The downsizing also affects operations in Oregon, Colorado, and even a backend manufacturing site in the Philippines.
Around the same time, Hewlett Packard Enterprise (HPE) revealed plans to cut 2,500 positions, pointing to economic pressures heightened by tariff-related market disruptions.
Meanwhile, onsemi has embarked on its own restructuring, leading to 2,400 job losses, as the company looks to improve its financial efficiency, aligning the company’s spending with market conditions
Continental AG has plans to cut 3,000 R&D positions in an effort to enhance competitiveness in a challenging automotive market and optimise the company’s global R&D network.
STMicroelectronics is reportedly considering a significant workforce reduction that could affect up to 6% of its employees. The plan, primarily targeting voluntary departures and early retirements, is expected to impact between 2,000 and 3,000 positions across its operations in Italy and France.
Dutch semiconductor company NXP has stated that it could reduce its global workforce by up to 1,800 positions due to growing market pressure. However, NXP clarified that the decision to slash jobs was not directly related to concerns over a potential trade war but rather to broader market conditions.
These are just some of the major workforce reductions that have unfolded in quick succession, signalling a period of profound uncertainty for employees across the sector. The layoffs and cost-cutting measures come as the semiconductor industry faces shifting demand, supply chain challenges, and economic uncertainties.
Beyond layoffs, the industry has been grappling with major project delays. Intel has pushed back its ambitious USD 28 billion manufacturing expansion in Ohio, with the timeline now stretching beyond 2030. Originally envisioned as a cornerstone of America’s semiconductor resurgence, the project now faces significant uncertainty. This delay follows broader struggles seen across the sector, as multiple fab projects are struggling with delays, suspensions, or outright cancellations.
At the policy level, the ongoing debate over how best to support the semiconductor industry has gained fresh momentum. US President Donald Trump made waves by criticising the CHIPS Act during a recent address to Congress, dismissing its incentives as ineffective and taking credit for recent industry investments instead. He argued that tariffs – not subsidies – have been the real driving force behind corporate spending decisions, pointing to major investments from firms such as TSMC and Apple as proof of his trade policies’ effectiveness.
As the quarter draws to a close, the semiconductor and electronics industry faces a landscape shaped by deepening uncertainty. Workforce reductions, stalled projects, and the shifting political climate continue to shape the sector. The increased use of tariffs has been a central theme in corporate decision-making, affecting both job cuts and manufacturing strategies. As 2025 progresses, these factors will likely continue to play a crucial role in determining the sector’s direction.
