NXP could cut 1,800 jobs as market challenges surface amid EU-U.S. trade talks

Dutch semiconductor company NXP said it could cut up to 1,800 positions from its worldwide workforce resulting from increased market pressure as European Union ministers meet to discuss trade relations with the United States. The company, which has major locations in Eindhoven, Nijmegen, and Delft, stated that it is unable to prepare for potential trade restrictions in the short term.

“We don’t know exactly what is coming,” an NXP spokesperson said. “That makes it impossible to anticipate. Producing a chip is a months-long process, which makes it difficult to adjust production on a daily basis.”

While the company has announced job cuts, NXP clarified that this decision is not directly related to concerns over a potential trade war but rather to broader market conditions. The firm anticipates a “slight contraction” in its workforce, with no more than 5 percent of jobs being eliminated globally.

With a total workforce of over 34,000 employees, including about 2,500 in the Netherlands, this reduction amounts to hundreds of jobs worldwide. The company told De Gelderlander that the job cuts would not necessarily be proportionate to each of its location's workforce.

The spokesperson acknowledged that import tariffs could lead to higher prices, which in turn could dampen demand. However, NXP operates in various markets and would need to assess the expected duration of such measures and their impact across different sectors.

NXP produces semiconductors for a wide range of internet-connected devices, with demand for certain products being particularly sensitive to economic fluctuations. The company has had to adapt to declining demand for automotive chips, a key part of its business.

The firm has not ruled out forced layoffs but hopes to manage the reductions through natural attrition. “I don’t think people will remain unemployed for long, given the high demand for technical personnel,” the spokesperson said.

NXP reported lower revenue and profit in 2023 compared to the previous year, citing ongoing economic challenges. The company, which is listed on the New York Stock Exchange, generated 12.6 billion USD in revenue last year, down from 13.3 billion dollars in 2023. Operating profit dropped by 6 percent to 4.4 billion dollars.

Despite these declines, CEO Kurt Sievers described the results as “resilient” given the difficult circumstances. “We remain focused on controlling what is within our sphere of influence to achieve a soft landing while executing our growth strategy,” Sievers said.

NXP operates in more than 30 countries and has a major facility in Nijmegen with approximately 1,600 employees. The company has positioned itself as a key player in the semiconductor industry, producing chips for various industries, including automotive and industrial sectors.

Earlier this year, NXP secured a 1 billion euros loan from the European Investment Bank (EIB) to accelerate its semiconductor innovation. The financing is specifically intended for chip development in the automotive and industrial sectors at NXP locations in the Netherlands, Austria, France, Germany, and Romania.