On June 13, 2024, ON Semiconductor Corporation (the “Company” and, together with its subsidiaries, “onsemi”) initiated several actions in furtherance of (1) its previously-announced “Fab Right” strategy, intended to optimize its manufacturing network, and (2) 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 $65 million and $80 million 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.
This Current Report on Form 8-K includes “forward-looking statements,” as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain statements, other than statements of historical facts, included in this document could be deemed forward-looking statements. Forward-looking statements are often characterized by the use of words such as “believes,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans,” “anticipates,” “should” or similar expressions or by discussions of strategy, plans or intentions. All forward-looking statements in this document are made based on our current expectations, forecasts, estimates and assumptions and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information, which speaks only as of the date made, except as may be required by law. Investing in our securities involves a high degree of risk and uncertainty, and you should carefully consider the trends, risks and uncertainties described in this document, our 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 5, 2024 and other reports filed with or furnished to the SEC before making any investment decision with respect to our securities. If any of these trends, risks or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially adversely affected, the trading prices of our securities could decline, and you could lose all or part of your investment. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.