Microchip cuts pay for some employees, reports say
February 9, 2024 — According to reports, Microchip Technology is implementing pay cuts and will shut down three of its largest U.S. fabs for two weeks in March and June in an effort to better manage inventory amid a weak macro environment.
The report pointed out that Microchip Technology’s three chip fabs in Tempe, Gresham, Oregon, and Colorado Springs will be suspended, and production activities at many other global factories will also be reduced.
Microchip Technology said that although it remains confident in long-term business opportunities, it is cautious about near-term demand and will therefore take measures to limit spending and strictly manage inventory.
“We plan to take a 10% pay cut for employees not related to the plant closure and a 20% pay cut for our management team. The manufacturing shutdown and the pay cuts for non-manufacturing team members are consistent with our long-standing culture. To avoid layoffs, and here Protecting manufacturing capabilities during the process is important to the company’s customers and long-term prosperity.” Microchip CEO Ganesh Moorthy said.
“We are working with our distribution partners to find the appropriate inventory balance needed to serve customers, manage their cash flow needs and prepare for an ultimately strengthening business environment,” Moorthy added.
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