Chip equipment maker Applied Materials is cutting 4% of its workforce, according to CNBC.
The company said in a filing that it began notifying affected employees globally "at all levels and functions" on Thursday. Applied Materials provides equipment, services, and software to a variety of industries, including the semiconductor industry.
According to the August 2025 filing, Applied Materials has approximately 36,100 full-time employees. A 4% workforce reduction would translate to approximately 1,444 employees.
"Automation, digitization, and geographic shifts are redefining our workforce needs and skill requirements. With this in mind, we have been focused for some time on building a high-speed, high-productivity team, embracing new technologies, and simplifying our organizational structure."
The move comes at the end of the company's fiscal year. Earlier this month, Applied Materials forecast a $600 million reduction in fiscal 2026 revenue due to the expansion of the U.S. export restriction list. This caused the company's stock price to fall 3% in after-hours trading.
The filing shows that Applied Materials expects to incur charges of approximately $160 million to $180 million due to the layoffs, primarily consisting of severance pay and other one-time termination benefits paid in cash.
The company said the job cuts were intended to position itself as a "more competitive and productive organization."
Earlier, Applied Materials' stock price fell 14%
During the August earnings season, Applied Materials issued weak guidance due to demand pressure from China, sending its stock price plummeting 14%.
The company projected adjusted earnings per share of $2.11, below the London Stock Exchange Group's estimate of $2.39 per share. It forecast revenue of $6.7 billion, compared with its previous forecast of $7.34 billion.
On a post-earnings call with analysts, CEO Gary Dickerson said the current macroeconomic backdrop and trade issues have exacerbated "increased uncertainty and reduced visibility," primarily in China.
He also said the guidance did not account for pending export license applications and assumed a significant backlog.
Applied Materials also cited weak performance from leading-edge customers, saying Chinese customers are reducing spending after a rapid increase in equipment manufacturing in the region.
Bank of America's Vivek Arya downgraded the stock to neutral and lowered its price target, citing continued headwinds in China and the leading-edge sector.
He wrote, "This uncertainty is likely to persist, making it difficult for shares to outperform the broader market despite reasonable valuations. We suspect this slowdown is more company-specific."
Despite weak guidance, Applied Materials beat earnings and revenue expectations for the third quarter, with adjusted earnings per share of $2.48 on revenue of $7.3 billion. Net income reached $1.78 billion, or $2.22 per share, compared to $1.71 billion, or $2.05 per share, in the same period last year.
Source: Content compiled from WSJ
