Onsemi's Restructuring Push: A Bold Move Amid Market Downturn

Onsemi, a leading semiconductor manufacturer, has announced a significant restructuring push, aiming to cut nearly 2,400 jobs this year. This strategic move comes as the company seeks to navigate the current market downturn and position itself for future success. In this article, we will delve into the reasons behind this decision, its expected impact, and the company's plans for reinvesting the savings.



Onsemi's exposure to the automotive and industrial sectors has led to a significant drop in sales and profits, with revenue falling by 14.6% year-over-year in the fourth quarter of 2024 and net income decreasing by 32.3% compared to the same period in 2023. The company's full-year revenue and net income also declined by 14.2% and 27.7%, respectively, in 2024 compared to 2023. To adapt to these challenging market conditions, Onsemi has announced plans to cut approximately 1,000 jobs and consolidate nine sites, with an additional 300 employees being reassigned or asked to relocate. This restructuring effort is expected to result in employment-related charges ranging from $65 million to $80 million over 2024 and 2025, with the process anticipated to be completed by 2025.

By streamlining its operations and reducing costs, Onsemi aims to better adapt to the current market challenges and improve its financial position. The company has stated that it will reinvest a portion of the savings from these cuts into new business initiatives and growth opportunities, which will help strengthen its market position and foster innovation in its core areas. This strategy is similar to the one implemented in 2023, when Onsemi laid off around 1,900 employees to manufacture more profitable chips internally while outsourcing other production to save costs.

Onsemi's focus on internally manufacturing its more profitable chips while outsourcing others is seen as a strategic move to enhance its competitiveness. By reallocating resources and optimizing its workforce, the company aims to navigate the current challenges while positioning itself for future growth. This restructuring effort is a bold move by Onsemi to adapt to the current market downturn and emerge stronger in the long run.

In conclusion, Onsemi's job cuts and restructuring efforts are designed to help the company adapt to the current market downturn and improve its financial position. By reinvesting savings into new business initiatives and optimizing its workforce, Onsemi is positioning itself to capitalize on new opportunities in the semiconductor industry and emerge stronger in the long run.