On October 24, 2025 (local time), Applied Materials (NASDAQ: AMAT), one of the world's largest semiconductor equipment manufacturers, announced a global workforce reduction of about 4%, or roughly 1,400 positions, as part of a restructuring plan aimed at streamlining operations amid mounting geopolitical and regulatory pressures.

The company said the layoffs will result in a pre-tax charge of $160 million to $180 million, mostly in the fourth quarter of fiscal 2025, according to a filing with the U.S. Securities and Exchange Commission (SEC). Applied Materials had approximately 35,700 full-time employees as of October 27, 2024, meaning the cuts will affect over 1,400 staff worldwide.

In an internal memo to employees, President and CEO Gary Dickerson said the move is intended to "transform how we work, move faster, simplify decision-making, and focus on what matters most as we prepare Applied Materials for significant growth in the coming years."

The restructuring follows the Biden administration's latest tightening of export controls on advanced semiconductor equipment. On September 29, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) expanded the so-called foreign affiliate rule, which applies restrictions not only to entities on the U.S. export control list but also to foreign subsidiaries directly or indirectly owned by those entities.

The new rules have made it more difficult for Applied Materials and other U.S. equipment makers — including Lam Research and KLA Corp. — to ship certain tools or provide maintenance services to customers in China without a license.

In an October 2 SEC filing, Applied Materials warned that the expanded export curbs could reduce revenue by $110 million in the fourth quarter of fiscal 2025 and by as much as $600 million in fiscal 2026. The company said shipments and service operations for some China-based clients had been disrupted, prompting an internal review to strengthen its operational resilience.

Despite these challenges, China remains Applied Materials' largest market. In its fiscal third quarter ended July 27, 2025, revenue from China accounted for 35% of total sales, up slightly from 32% a year earlier. CFO Brice Hill noted, however, that the company expects "a few quarters of decline" in China-related business as customers digest previously delivered tools.

Analysts say the layoffs and restructuring highlight the mounting strain U.S. semiconductor equipment suppliers face under tightening export restrictions. Yet they remain optimistic about medium- to long-term growth prospects, citing strong demand for AI chips, advanced packaging technologies, and high-bandwidth memory (HBM).

Applied Materials emphasized that while short-term headwinds persist, the company remains focused on building a more agile, efficient organization to seize emerging opportunities in next-generation semiconductor manufacturing.