Vishay Restructures: 800 Jobs Cut, 3 Factories Close

Vishay Intertechnology, a leading manufacturer of discrete semiconductors and passive components, has announced a significant restructuring initiative aimed at streamlining operations as part of its Vishay 3.0 growth strategy. On September 24, the company revealed plans to consolidate manufacturing facilities and reduce its workforce.

The restructuring will involve the closure of three manufacturing plants: a diode packaging facility in Shanghai, China, and two resistor plants located in Fichtelberg, Germany, and Milwaukee, Wisconsin, USA. The closures are expected to be completed by the end of 2026, with production transfers commencing in the fourth quarter of 2025.

This initiative is anticipated to result in a reduction of approximately 365 direct employees, representing 2% of the manufacturing workforce. Additionally, the company will streamline its sales, general, and administrative functions, affecting about 170 employees, or 6% of the total workforce. Overall, the manufacturing and production shifts will lead to a total reduction of 795 employees.

The restructuring is expected to incur pre-tax cash charges of between $38 million and $42 million, primarily due to severance costs, most of which will be recognized in the third quarter of 2024. Vishay projects annual cost savings of at least $23 million following the full implementation of the plan, with immediate savings of approximately $9 million and an additional $12 million anticipated starting in the first quarter of 2025.

Joel Smejkal, Vishay's President and CEO, stated that these measures are designed to enhance decision-making processes, improve customer focus, and increase cost efficiency. The restructuring will also optimize the company's global manufacturing footprint by transitioning to campus manufacturing structures that accommodate multiple product lines.

In its second-quarter financial report for 2024, Vishay reported stable revenue of $741.2 million, with a gross margin of 22.0%, impacted by the acquisition of Newport wafer fabrication. The company anticipates third-quarter revenues to range between $725 million and $765 million, with a projected gross margin of 21.0%.

Strategically, Vishay plans to invest $2.6 billion from 2023 to 2028 to expand its capacity, targeting a 12% increase in MOSFET capacity by 2025 and a 5.5% increase in semiconductor product capacity by 2024.