Amid shrinking profits and demands and EU-US trade talks, NXP plans to reduce its workforce by 5 per cent in Europe as market pressures mount.
Dutch semiconductor company NXP has warned that it may cut up to 1800 jobs globally due to increased market pressures, coinciding with ongoing EU-US trade discussions.
The company, which operates major designing, testing, and research and development (R&D) facilities in Eindhoven, Nijmegen, and Delft, Netherlands, stated that it is unable to anticipate potential trade restrictions in the short term.
According to a report by NL Times, NXP is unsure of what lay ahead, which made it impossible to prepare. A company spokesperson added that producing a chip was a months-long process, making it unfeasible to adjust production daily.
Although layoffs have been announced, NXP clarified that these reductions are not directly linked to the possibility of a trade conflict but rather reflect broader market challenges.
The company expects a minimal contraction in its workforce, with no more than 5 per cent of jobs being eliminated globally. It also hopes to achieve job cuts through natural attrition. The spokesperson expressed confidence that technical professionals would find employment quickly due to the high demand for such skills.
With a workforce of over 34,000, including around 2500 in the Netherlands, this reduction will impact hundreds of positions worldwide. NXP clarified that the cuts would not be proportionately distributed across its various locations.
The spokesperson also acknowledged that import tariffs could raise prices, dampening consumer demand. However, as NXP operates across multiple sectors, it must assess the likely duration of such measures and their impact on various markets.
NXP manufactures semiconductors used in a wide range of connected devices, with some product demands being especially vulnerable to economic shifts. The company has already faced a decrease in demand for automotive chips, which are a significant part of its business.
For the full year 2023, NXP reported a decline in both revenue and profit. Revenue dropped from $13.3 billion in 2022 to $12.6 billion in 2023, and operating profit fell by 6 per cent to $4.4 billion.
CEO Kurt Sievers characterised the results as “resilient” under challenging conditions despite these setbacks. “We remain focused on controlling what is within our sphere of influence to achieve a soft landing while executing our growth strategy,” Sievers said.
NXP, which operates in over 30 countries, also has a significant presence in Nijmegen, employing about 1600 people. Earlier this year, the company secured a €1 billion loan from the European Investment Bank (EIB) to support semiconductor innovation, particularly in the automotive and industrial sectors, at its facilities in the Netherlands, Austria, France, Germany, and Romania.
