Applied Materials to cut 4% of global workforce as it struggles with revenue loss from China export restrictions

Company began notifying impacted workers on October 23

Applied Materials is planning to cut four percent of its global workforce as it struggles to deal with the financial fallout from the US strengthening export restrictions to China.

Given the size of the US chipmaking equipment manufacturer's current workforce, the cuts could affect more than 1,400 employees, Bloomberg reports. The company began notifying impacted workers on October 23.

The expanded restrictions on the sale of US chipmaking equipment to China were first introduced by the Biden Administration in 2022, with companies including Applied Materials blocked from exporting chipmaking equipment to Chinese factories that produce advanced semiconductors with sub-14-nanometer processes without a license from the Commerce Department.

Such restrictions have been further strengthened since the start of President Donald Trump’s second term, and Applied Materials stated earlier this month that expanded curbs on exports to China would cost the company $600 million in lost revenue during FY2026.

“Our goal is to continue 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,” said CEO Gary Dickerson in an email to employees. “I appreciate everyone’s support as we make these changes.“

The company said it expects to incur charges of approximately $160m to $180m relating to severance and other one-time employment termination benefits, with the charges set to be primarily recognized in Q4 2025.

In 2024, Applied Materials was subject to an investigation by the US Commerce Department after it was alleged that the company bypassed US sanctions by shipping hundreds of millions of dollars' worth of semiconductor manufacturing equipment to the partly Chinese state-owned SMIC via a South Korean subsidy.

Apple announced in August 2025 that, as part of its $600 billion American Manufacturing Program, it would partner with Applied Materials to “boost the production of semiconductor manufacturing equipment in the US.”