March 3, 2025 /SemiMedia/ — Microchip Technology plans to lay off employees at its Oregon and Colorado facilities in response to a significant drop in sales.

In a statement on February 28, the company said it is still assessing the number of affected employees, emphasizing that the decision was not made lightly and expressing regret over the impact on its workforce.

Microchip reported a 41.9% year-over-year decline in net sales for its fiscal third quarter of 2025, down to $1.026 billion. Gross margin fell to 54.7%, with operating income at $30.9 million and a net loss of $53.6 million.

CEO and President Steve Sanghi said the company must take decisive actions to address declining revenue and rising inventory, which reached 266 days. Since returning as CEO in November, Sanghi has implemented key initiatives, including restructuring manufacturing operations, refining channel strategies, and strengthening customer engagement. He added that further operational improvements are underway to enhance the company’s competitiveness.