Title says it all. Will get worse. Anticipate company 50,000 mid 2026 and sold off for parts. Stock up.
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LBT prefers to take action now and talk about it later, so isn't saying anything about the $5 Billion a year cost savings he is about to enact.
From a 2024 baseline the company needs something over $5B per year savings just to get to a 50% gross margin, with revenue as the obvious wildcard.
This is merely finishing what they did in 2024, then comes the real work to be done.
Fully leveraging AI, and selling old fabs and nonperforming products should enable up to $10B a year in cost savings, and greatly reduce the capital requirements as well.
This is all manager math. Someone can waste some time in Excel and make up a powerpoint to define the savings to the nearest dollar (as if anyone cares).
@bn call me in Dec and Jan when the next lists are being created. Writing is on the wall. LBT needs to make it more profitable and we are losing sales faster. The $1B 2026 savings are new savings not counted from previously layoffs. Some will be other expense so not all blue badges.
@b1 @b1 No. People leaving will exit in July/August, but severance will pay out a minimum of 9 weeks (+ additional for years of service). So effectively most people leaving will be paid as if they are here through Q3, some even through Q4.
So we will at best have 1/3 of the year with these people off payroll ($500M). Next year we will have that same 1/3 ($500M) + the other 2/3 ($1B).
Math.
@ak sorry to say the $1B is savings is ontop of the 2025 savings forward.
To think that there won’t be another massive layoff at the beginning 2026 is an ostrich with head in the sand. Going to happen.
As prophesized by BTO: You Ain't Seen Nothing Yet.
Something like 25% of the headcount is going to be outsourced. This is across fabs, products, and support groups. Some support groups will be fully outsourced, with massive badge flipping elsewhere.
Production is about half of the total headcount, and at least 2 or 3 fabs will be sold to another foundry. That will be another 10%-15% of total headcount.
Non-EUV fabs won't ever be retrofitted and are quite busy making 10nm and 7nm, so at peak valuation and that makes this the right time to sell them, then buy back the wafers from the acquiring foundry.
Non-core or non-performing products will be in either sold or shut down, and that is somewhere in the range of 5% of total headcount.
This adds up to at least 40% of the current headcount, over the next few years.
So in reality this is just the start of the savings, with many billions to be saved per year yet to come.
It's $500m this year because the layoffs are happening in the middle of the year. It's $1b next year because the layoffs will be in place all year.
@OP Nope... But thanks for playing!