On Semiconductor to incur $65M-$80M charge amid Fab Right strategy, layoffs

On June 13, ON Semiconductor initiated several actions in furtherance of its previously-announced “Fab Right” strategy, intended to optimize its manufacturing network, and its overall efforts to consolidate its global corporate footprint. onsemi intends to consolidate nine sites and reduce its current global workforce by approximately 1,000 employees. Around 300 additional employees will be reassigned or asked to relocate to another onsemi site. onsemi expects to complete this process during 2025, subject to applicable local law and regulations. As a result, the Company estimates that it will incur between $65M and $80M in employment-related charges in 2024 and 2025 for, among other things, one-time cash payments for severance, benefits expenses, payroll taxes and other ancillary charges. onsemi expects that the majority of these charges will be recorded during calendar year 2024. The Company plans to reinvest a substantial portion of the savings generated from these actions into its continuing workforce and certain business initiatives and opportunities. Consequently, these actions may not result in a material reduction in the Company’s future operating expenses.