Microchip Technology, based in Chandler, Arizona, is set to lay off more than 200 employees at its Colorado Springs chip manufacturing facility amid declining demand from automakers. The layoffs, affecting about 9% of Microchip’s global workforce, are part of cost-saving measures expected to save the company multimillions in annual expenses. The company cites difficulties in reducing excess chip inventories by automotive customers and ongoing supply chain disruptions following stockpiling during the COVID-19 pandemic.
The Colorado Springs layoffs are part of a larger restructuring effort, with additional cuts expected at facilities in Oregon and the Philippines, affecting various business units and support groups. Most of the planned job cuts in Colorado Springs are for production specialists. Despite the layoffs, the company is reinforcing its commitment to its Colorado and Oregon facilities for long-term production and capacity.
Microchip’s president and CEO, Steve Sanghi, highlighted the need for layoffs to ensure the company’s competitiveness in the global market. While initially planned as permanent, Sanghi indicated a potential for rehiring once excess inventory is corrected. The layoffs come amid a challenging semiconductor market but are not expected to significantly impact Colorado Springs’ thriving economy, with industries like aerospace and defense continuing to attract skilled workers and investments.
The Colorado Springs Chamber of Commerce & Economic Development Corp. emphasized the region’s economic resilience, citing growing opportunities in advanced industries fueled by technological advancements like artificial intelligence and 5G. With multiple economic development projects bringing in thousands of jobs and significant capital investments, the region remains an attractive location for businesses despite Microchip’s layoffs.
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