HP and Microchip Layoff Thousands Amid Economic Uncertainties

HP Inc. and Microchip Technology have announced significant layoffs, affecting thousands of employees worldwide. These moves come as companies grapple with economic uncertainties, including the impact of new tariff policies and shifting market demands.

Microchip Technology, a leading semiconductor manufacturer, has revealed plans to cut approximately 2,000 jobs across its global operations. The layoffs, scheduled to take place between March and June 2025, are expected to generate annual savings of $90 million to $100 million for the company. The workforce reductions will affect employees in Oregon, Colorado, and the Philippines, as well as various business units and support groups.

In addition to the job cuts, Microchip is accelerating the closure of its Tempe, Arizona wafer fabrication facility, which will result in an additional 500 job losses. The company now anticipates shutting down operations by May 2025, earlier than initially planned. Microchip is also canceling or modifying multiple supplier agreements, citing lower inventory needs. According to the company's filing, this move will save an additional $45 million "as the Company does not expect that it will purchase the specified number of wafers within the time periods required in the agreements".

Meanwhile, HP Inc. has announced plans to lay off between 1,000 and 2,000 employees globally. This decision is part of a broader restructuring plan aimed at saving the company $300 million and contributing to a total cost reduction of $1.9 billion. HP CFO Karen Parkhill explained the rationale behind the layoffs, stating, "These incremental structural savings will be a key lever to help offset macro and geopolitical uncertainties, while also continuing to fuel investments in our key growth areas and AI innovation, all designed to position as well for long term sustainable growth".

The layoffs at HP are expected to be completed by the end of the company's fiscal year in October 2025. While specific roles affected by the cuts have not been disclosed, the company has indicated that the scope of the layoffs will vary by location.

These workforce reductions at HP and Microchip come at a time when the tech industry is facing numerous challenges, including the implementation of new tariffs on Canada, Mexico, and China, as well as upcoming tariffs on steel and aluminum. The uncertainty surrounding these trade policies has prompted companies to reevaluate their operational strategies and seek ways to improve efficiency.

As the tech sector continues to navigate these economic headwinds, it is likely that more companies will follow suit with similar cost-cutting measures. The impact of these layoffs on the industry and the broader economy remains to be seen, but it is clear that tech giants are taking proactive steps to position themselves for long-term sustainability in an increasingly competitive and uncertain market.