COVID-19 pushes ON Semiconductor to restructuring
As a direct result of the novel coronavirus pandemic, ON Semiconductor has filed Federal form 8-K, outlining its restructuring plans.
Termination numbers included in the regulatory filing, released after markets closed on April 9, amount to 1.4% of the company's worldwide employee workforce of 34,800. As of December 31, 2019, the company had 4,600 employees in the U.S. Specific lay-offs at the company’s U.S. headquarters in Phoenix, or its other North American facilities were not detailed. The restructuring was hinted at back in early March, when ON Semi CEO Keith Jackson alerted investors of upcoming cost-cutting measures that would see a yearly savings of approximately USD 90 million. Jackson said the majority of that amount would be found in operating expenses, but did not elaborate on exactly what those cuts would look like. In the 8-K filing, the company estimated that it expects to incur USD 43 - 47 million in aggregate costs during the first two quarters of 2020 “in connection with the Employment Separations relating to one-time cash payments for severance, medical benefit continuation payments, payroll taxes and related costs.” The filing also said the layoffs would result in annual savings of USD 65 - 70 million, “the majority of which are expected to be the result of reductions in operating expenses and costs of goods sold.”