CHANDLER, AZ — Microchip Technology Inc. is implementing pay cuts for its workers along with a two-week shutdown at its three largest semiconductor factories in the U.S. — including in Tempe — in March and June as it seeks to better manage inventory amid a 'weak macro environment.'
The Chandler-based microcontroller manufacturer said on a Feb. 1 earnings call that while it remains confident about long-term business opportunities, it’s cautious about near-term demand, prompting steps to limit spending and tightly manage inventory.
The two-week shutdowns will occur at Microchip's three chip fabs in Tempe, Gresham, Oregon and Colorado Springs, along with activity reduction at many of the company's other global factories.
In addition, Microchip (NASDAQ: MCHP) is planning a 10% pay cut for employees not associated with factory shutdowns and a 20% pay cut for its executive team, Microchip CEO Ganesh Moorthy said on the earnings call.
“The shutdowns for manufacturing team members and pay cuts for non-manufacturing team members are consistent with our long-standing culture of shared sacrifices and down cycles and shared rewards and up cycles,” he said. “That's avoiding layoffs, and in the process protecting manufacturing capability, as well as high-priority projects, which are important for our customers and us to thrive in the long-term.”
