Applied Materials Announces 4% Workforce Reduction

Applied Materials, a leading chip equipment manufacturer (NASDAQ: AMAT), is reducing its global workforce by 4% as part of a broader strategic realignment aimed at boosting competitiveness and navigating evolving market dynamics.

The company initiated notifications to affected employees across all levels and groups on Thursday, according to a recent SEC filing. Applied Materials is a key player in providing equipment, services, and software to the semiconductor and related industries.

With approximately 36,100 full-time employees reported in August 2025, the 4% reduction corresponds to roughly 1,444 positions. This move, while impactful to those affected, underscores the intensifying pressures within the semiconductor supply chain.

“Automation, digitalization and geographic shifts are redefining our workforce needs and skill requirements,” the company stated in the filing. “With this in mind, we have been focused for some time on building high-velocity, high-productivity teams, adopting new technologies and simplifying organizational structures.” This statement points to a strategic pivot toward optimized operations and increased efficiency in a rapidly changing technological landscape. The company aims to streamline processes and leverage automation to maintain its competitive edge.

The restructuring comes at the close of Applied Materials’ fiscal year and follows a recently forecasted $600 million revenue impact to fiscal 2026 due to expanded U.S. export restrictions. This forecast triggered a 3% dip in company shares during extended trading, highlighting investor concerns about the potential effects of geopolitical tensions on the semiconductor industry and its suppliers.

Applied Materials anticipates incurring charges of approximately $160 million to $180 million as a result of the workforce reduction. These expenses encompass severance packages and associated one-time employment termination benefits, which will be paid out in cash. While these costs will affect short-term profitability, the company anticipates long-term gains from increased operational efficiency and a streamlined organizational structure.

The company maintains that these workforce adjustments are designed to proactively position itself “as a more competitive and productive organization” in the face of increasing global competition and evolving technological requirements. This strategic move suggests that Applied Materials is actively adapting to the changing dynamics of the semiconductor industry and investing in its future success through optimized operations and resource allocation. The company’s long-term vision includes leveraging automation and digitization to solidify its position as a leading technology provider in the semiconductor ecosystem.