Semiconductor equipment leader Applied Materials has announced a plan to reduce its global workforce by approximately 1,400 full-time employees, representing about 4% of its total headcount. The layoffs will affect "all levels and functions" and are expected to incur $160 to $180 million in one-time costs, primarily for severance.
In an internal memo, CEO Gary Dickerson stated the move aims to "simplify our organizational structure and accelerate decision-making" to sharpen focus on core businesses and position the company for future growth.
A key driver for the restructuring is the declining revenue contribution from China. Revenue from the region has dropped from 40% of the total a year ago to 30% in the first three quarters of the current fiscal year, and is projected to fall further to 29% in Q4. This decline is attributed to tightened U.S. export controls and slowing spending from Chinese customers. The company had previously warned that these controls would reduce its fiscal 2026 revenue by an estimated $600 million.
Despite posting a record quarterly revenue of $7.302 billion in Q3 FY2025, the company's non-GAAP gross margin contracted by 0.3 percentage points to 48.9%, indicating pressure on profitability.
ICgoodFind : This restructuring highlights the profound transformation global semiconductor supply chains are undergoing from both geopolitical and market cycle pressures.
