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Applied Materials, Inc. (NASDAQ:AMAT), a prominent player in the semiconductor equipment industry with annual revenue of $28.61 billion, announced Thursday that it has approved a workforce reduction plan expected to affect approximately 4 percent of its global workforce. The company anticipates incurring charges of about $160 million to $180 million as a result of this action. These charges will primarily consist of severance and other one-time employment termination benefits to be paid in cash, along with additional non-cash related charges.
According to the company’s statement, most of the charges are expected to be recognized in the fourth quarter of fiscal 2025. The plan is expected to be completed in the first quarter of fiscal 2026, subject to local legal requirements and consultation with employee works councils and other employee representatives where applicable.
Applied Materials stated that its President and Chief Executive Officer, Gary E. Dickerson, informed employees of the plan via email on Thursday. The company noted that the information was disclosed in a press release and accompanying SEC filing.
Applied Materials, headquartered in Santa Clara, California, is listed on The NASDAQ Stock Market LLC under the ticker AMAT.
In other recent news, Applied Materials announced the introduction of three new semiconductor manufacturing systems designed to enhance the performance of advanced logic and memory chips used in AI computing. The new Kinex Bonding system, noted for being the industry’s first integrated die-to-wafer hybrid bonder, aims to produce higher performance chips with lower power consumption. Meanwhile, the company disclosed that recent U.S. export control changes will adversely affect its business operations in China, impacting system shipments and service revenue. Despite these challenges, Stifel raised its price target for Applied Materials to $215, maintaining a Buy rating, citing the company’s robust product portfolio. Cantor Fitzgerald also reiterated an Overweight rating with a $225 price target, estimating only a minor impact on the company’s fiscal year 2026 revenues due to the new regulations. Additionally, Bernstein SocGen Group maintained its Outperform rating, with a $195 price target, despite acknowledging the regulatory hurdles. These developments highlight the company’s ongoing efforts to innovate while navigating complex international regulations.
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