Lam Research, one of the three biggest US chip manufacturing equipment makers, plans to cut ~7% of its workforce, or ~1,300 jobs worldwide, to reduce expenses
Ian King / Bloomberg :
Context & Ripple Effects
Lam Research's cut lands mid-downturn: weeks earlier, customer Micron reported revenue down ~47% YoY and its own ~10% workforce reduction, a signal that memory makers were slashing capex — the spending that buys Lam's etch and deposition tools. The squeeze on Lam itself showed up months later, when it posted revenue down 31% YoY, its third straight quarterly decline.
The move also fits an industry-wide cost reset that kept unfolding: by late 2025, rival Applied Materials announced its own ~4% global workforce cut with $160M-$180M in charges, while Intel and STMicroelectronics pursued double-digit and ~6% reductions respectively.
First-order effects
- About 1,300 Lam employees worldwide lose their jobs as the company cuts expenses against collapsing tool orders from memory customers like Micron.
- Lam joins its largest customers in retrenchment — the equipment maker is now absorbing the capex pullback that Micron's December restructuring foreshadowed.
Second-order effects
- Rival toolmakers Applied Materials and KLA face the same soft equipment market and come under investor pressure to match Lam's cost discipline — a pressure Applied eventually acted on with its own ~4% cut.
- With all three top US equipment makers trimming simultaneously, pricing and service competition intensifies for the shrinking pool of fab construction projects still moving forward.
Third-order effects
- If the pattern holds, wafer-fab-equipment headcount becomes explicitly cyclical, sized up and down with memory capex rather than held through downturns — deepening the boom-bust employment cycle across the chip supply chain.
- Synchronized cuts at memory makers, equipment vendors, and IDMs point toward a more consolidated industry exiting the downturn, with survivors positioned for the next capacity build.
The trend: The 2023 chip downturn is driving synchronized layoffs across every layer of the semiconductor supply chain — memory makers first, then the equipment vendors who sell to them.