Microchip Technology cutting jobs in Colorado

According to a story in The Gazette, Microchip VP Dan Malinaric said via email that the job cuts will reduce Microchip’s workforce from 800 to a little more than 500, and the reductions are a mix of layoffs, voluntary resignations and transfers to alternate locations. Although the exact number isn’t known, the first phase of layoffs will happen this quarter. Malinaric also said 67 workers at the plant have agreed to resignations and 15 will transfer to Microchip plants in Arizona and Oregon. In the email, Malinaric said that Microchip is making “generous severance offers” to employees who voluntarily quit, as well as extending relocation packages to those willing to transfer. The shrinking of Microchip may signal the end of the chipmaking industry in Colorado Springs. In its chipmaking heyday in the ‘80s and ‘90s, a half-dozen plants employed thousands in Colorado Springs, but that has dwindled to just one as the manufacturing exodus overseas has occurred. According to Colorado Springs Chamber President Dick Draper, Microchip is the only semiconductor manufacturer left in town, the Gazette story said. In 2016, Microchip acquired Atmel for USD 3.56 billion, and the sale made Microchip the world’s third-largest producer of microcontrollers. The Atmel plant had about 1,000 employees when it was taken over by Microchip and the company said that it would invest several million dollars in the 400,000-square-foot facility and move much of its production to the plant. In his recent email to The Gazette, however, Malinaric said that products produced at the plant “have experienced some long-term decline” as companies have shifted to more advanced technologies. While Microchip’s production of its remaining high-volume products will be transferred to its Arizona and Oregon plants, the Colorado Springs plant isn’t closing, the email said. Instead, Microchip will transfer products and technologies gained from its 2018 purchase of Microsemi, in addition to a USD 10 million investment to upgrade production at the Colorado Springs plant, Malinaric said. “These transfers will transform (the Colorado Springs plant) into a specialty or boutique fab focusing on manufacturing automotive, military and aerospace products,” Malinaric said in the email.