US chip manufacturer Microchip has announced plans to lay off 500 employees due to slower than expected order turnover and manufacturing restructuring plans. According to Microchip's latest annual report submitted in May, the company has approximately 22300 employees.
Previously, Microchip stated that it expects to close its Fab 2 manufacturing business in the second quarter due to higher than expected inventory levels.
Microchip stated that it expects the restructuring costs to be between $3 million and $8 million in the near future, but the company may incur additional restructuring and closure costs of up to $15 million in the future. Due to the high inventory of products produced by Fab 2, the company expects to see savings from the shutdown only in the early first quarter of fiscal year 2026.
Microchip's interim CEO and President Steve Sanghi stated that as of now, the order volume for the third quarter has been lower than expected. Therefore, the company expects its revenue to be close to the lower end of its previous expectations, ranging from $1.025 billion to $1.095 billion.
