ASML Cuts 1,700 Jobs Despite Record Sales Boom

ASML Holding NV, the Dutch semiconductor equipment giant, announced plans to cut approximately 1,700 jobs, representing 4% of its workforce, despite reporting record-breaking sales and strong growth projections for 2026. The job cuts will primarily affect the company's Tech and IT organizations, according to CEO Christophe Fouquet.

This decision comes as something of a paradox in the tech industry. While ASML is experiencing a sales boom driven by surging demand for advanced chip-making equipment, the company says it's responding to internal feedback that it has become too bureaucratic. The move suggests that even successful tech companies are feeling pressure to streamline operations and improve efficiency.

ASML's stock jumped more than 5% in pre-market trading following the announcement, indicating that investors view the job cuts as a positive step toward operational efficiency. This market reaction highlights the complex relationship between workforce reductions and stock performance in the tech sector.

Record-Breaking Performance

The job cuts announcement came alongside impressive financial results. ASML reported record quarterly bookings of €13.2 billion in Q4, more than double the estimated €6.32 billion. The company also projects 2026 full-year sales between €34 billion and €39 billion, above the €35 billion estimate.

These numbers reflect the ongoing global semiconductor boom, particularly driven by artificial intelligence and high-performance computing applications. ASML's extreme ultraviolet (EUV) lithography machines are essential for producing the most advanced chips used in AI training and other cutting-edge applications.

Industry Context

ASML's decision mirrors a broader trend in the tech industry where companies are simultaneously announcing job cuts while reporting strong financial performance. Amazon recently announced plans to cut approximately 16,000 roles across the company as part of an effort to reduce organizational layers and bureaucracy.

The semiconductor industry has been particularly volatile, with companies like SK Hynix reporting record profits driven by AI HBM demand, while others adjust their workforce to match changing market conditions and internal efficiency goals.

China Market Significance

ASML's announcement also highlighted China's importance to its business, with the company expecting China to account for 20% of its total 2026 sales. This comes amid ongoing geopolitical tensions and export restrictions affecting semiconductor equipment sales to China.

Nvidia has allocated approximately 70% of its 2026 HBM4 demand to SK Hynix, indicating the interconnected nature of the semiconductor supply chain and the strategic importance of maintaining relationships with key suppliers and customers in different regions.

The Bureaucracy Question

The decision to cut jobs in Tech and IT specifically suggests that ASML is targeting internal processes and systems that may have become inefficient as the company grew. This is a common challenge for successful tech companies that expand rapidly and find themselves burdened with legacy systems and organizational complexity.

By reducing bureaucracy while maintaining strong sales growth, ASML appears to be positioning itself for even greater efficiency and competitiveness in the highly demanding semiconductor equipment market.

The juxtaposition of job cuts with record sales and optimistic guidance creates an interesting narrative about how even the most successful tech companies must continually evolve their operations to remain competitive in a fast-moving industry.