Breaking the Cycle: How Semiconductor Layoffs Highlight the Industry’s Need for Leadership Accountability and Workforce Sustainability!

A 26-Year Perspective

After spending over 26 years in the semiconductor industry, one consistent observation I’ve made is how the industry repeats the same mistakes with cyclical hiring and firing. When demand surges, companies go on hiring sprees, only to lay off workers en masse when the market inevitably slows down. This recurring cycle not only destabilizes the workforce but also has deeper repercussions that go beyond the immediate impact of job losses. The semiconductor industry must address these issues with a more sustainable approach, starting with leadership accountability.

Take the recent wave of layoffs as an example. In August 2024 alone, we saw layoffs across the tech sector spike by 193% compared to the previous month, with over 39,563 job cuts, most of them within the semiconductor industry. Companies like Infineon, Intel, Applied Materials, and Onsemi have all announced significant reductions in their global workforce. Intel, for instance, announced that it would be cutting 15% of its workforce, or around 15,000 jobs, in what CEO Pat Gelsinger described as “some of the most consequential changes in the company’s history.” But why are these mass layoffs always treated as an inevitable, necessary evil? Why is it always the workers who bear the brunt of poor long-term planning by corporate leadership?

It’s my firm belief that layoffs should start at the top. Corporate executives need to take accountability for the decisions that lead to mass layoffs. Borrowing from Warren Buffett’s idea of holding elected officials accountable, I propose that semiconductor executives who announce mass layoffs should forgo bonuses or board appointments. It’s time for leaders to share in the consequences of their decisions and make workforce sustainability a priority, not an afterthought.

Workforce Retention and Its Broader Impacts

The industry's failure to retain employees during downturns has far-reaching consequences. One of the most significant effects is on the talent pipeline. We are now facing historically low student enrollment in STEM fields, particularly in semiconductor-related programs. Why? Because students see the instability in the job market and are dissuaded from pursuing careers in an industry that seems to treat its workforce as expendable. If semiconductor companies had a more balanced approach to workforce management, we wouldn't be facing this shortage of young talent.

This talent drain is exacerbated by the industry’s increasing reliance on lobbying for immigration visas to fill the gaps left by workforce reductions. Rather than investing in their current employees or offering competitive pay and benefits to attract new talent from within the country, companies are turning to the government to solve their staffing problems. The semiconductor industry can—and should—do better. If companies were to retain more employees during downturns, they could foster a more stable and attractive career path for future engineers and technicians. This, in turn, would drive student enrollment and reduce the need for external talent solutions like immigration visas.

Infineon’s recent announcement to cut 1,400 jobs worldwide and relocate another 1,400 is a clear example of the shortsightedness that plagues the industry. Infineon is relocating jobs to countries with lower labor costs, a move designed to save money in the short term but with long-term consequences for both the company's reputation and the industry’s talent pipeline. Similarly, Onsemi announced a reduction of 1,000 jobs globally, citing the need to streamline operations. These actions, while financially motivated, raise critical questions about the industry’s long-term sustainability and its ability to attract and retain top talent.

The Future for Semiconductor Professionals

For semiconductor professionals affected by these layoffs, this period of transition presents both challenges and opportunities. The key to thriving in this changing landscape is adaptability. The industry is undergoing a significant transformation, driven by technological advancements like AI, robotics, and automation. Professionals who can reskill and align their expertise with these emerging areas will find themselves in high demand.

AI and automation, in particular, are reshaping how semiconductors are designed and manufactured. The demand for professionals skilled in AI-driven chip design, robotics integration, and advanced manufacturing techniques is only going to increase. Similarly, sustainability is becoming a focal point in the semiconductor industry. As companies move toward greener operations, engineers with expertise in sustainable practices and materials will play a critical role in the future of the industry.

Exploring new market segments is another avenue for professionals looking to pivot during these times. Sectors like power electronics, electric vehicles, and renewable energy are experiencing rapid growth. The growth of companies like Tesla, which is leading the charge in emerging industries like robotics and automation, signals the increasing importance of these sectors moving forward. Professionals with skills in these areas will find themselves well-positioned for the next phase of their careers, as these industries continue to expand and drive innovation in the semiconductor and technology space.

A Broader Industry Shift

The current wave of layoffs is symptomatic of a broader restructuring in the semiconductor industry. Global economic pressures, automation, and the push for supply chain localization are driving companies to reassess their operations. However, this restructuring also presents an opportunity to rethink workforce management. Rather than continuing the cycle of rapid hiring followed by mass layoffs, companies should invest in long-term workforce strategies that prioritize employee retention, skills development, and competitive compensation.

This isn’t just about protecting jobs in the short term—it’s about creating a sustainable future for the industry. Semiconductor companies that retain their employees during downturns will not only foster loyalty but will also be better positioned to innovate and capitalize on emerging technologies like AI and quantum computing. By investing in their people, companies can build a more resilient and agile workforce, ready to meet the demands of the future.

What Needs to Change

For the semiconductor industry to break this cycle, leadership accountability is key. Companies must move beyond the short-sighted approach of cutting jobs to save costs and instead focus on building a sustainable workforce. This means investing in reskilling programs, offering competitive pay, and fostering a culture of innovation that attracts the best talent.

Furthermore, the industry must take responsibility for its broader social and economic impact. Just as Warren Buffett suggested that elected officials should be held accountable for poor financial management, semiconductor executives should be held accountable for mass layoffs. If we expect students to invest in a career in this field, companies need to demonstrate that they value their workforce, not just in times of growth but also in times of challenge.

Call to Action

The semiconductor industry stands at a pivotal moment. Will we continue the same cyclical pattern of layoffs and rehiring, or will this be the turning point where companies rethink their workforce strategies? Now is the time to weigh in and share your thoughts. Should executives face greater accountability for their decisions? What changes need to happen to make the semiconductor industry a more stable and attractive career choice for the next generation?

Organizations like VentureLab are already leading the charge toward innovation and workforce transformation. They’re empowering professionals by providing the tools, networks, and knowledge to thrive in the rapidly changing semiconductor landscape. As we approach the Hard Tech Summit, an event proudly sponsored by VentureLab, it’s clear that this is more than just a discussion—this is about shaping the future.

The Hard Tech Summit will be a critical platform for exploring how emerging technologies like AI, automation, and sustainability are transforming not only how semiconductors are designed and manufactured but how companies can adapt their workforce to stay competitive. This is where the next wave of semiconductor leaders will gather to drive meaningful change, and it’s the perfect opportunity to join the conversation.

Conclusion

The semiconductor industry’s repeated cycle of layoffs isn’t just unsustainable—it’s damaging to its long-term growth and talent pipeline. It’s time for leadership to be held accountable and for companies to prioritize workforce retention and development. By investing in their people, semiconductor companies can create a more balanced, resilient, and innovative future for all.

News article Sources: https://docs.google.com/document/d/1w8FWW2BPeCpj3M1XoXRfaeJDBfs4w44JsXDdELrUodI/edit?usp=sharing