The global artificial intelligence arms race has propelled semiconductor titan ASML to its most profitable year ever, though the windfall comes with a bitter pill for its workforce. Despite a record-shattering $11.5 billion (€9.6 billion) net profit in 2025, the Dutch-based lithography giant announced plans to slash roughly 1,700 positions, representing about 4% of its global staff.
The move highlights a “trim the fat” strategy often seen in Big Tech: optimizing operations at the peak of financial success to prepare for an even more demanding 2026.
Efficiency Over Expansion: Why the Layoffs?
While the layoffs may seem counterintuitive given the company’s €32.7 billion ($39.2 billion) in total sales, leadership insists the restructuring is about agility, not austerity.
- Focusing on Innovation: The cuts primarily target technology and IT departments to reduce organizational complexity.
- “Engineers being Engineers”: ASML CFO Roger Dassen noted that the company had become too complex, with internal feedback suggesting that excessive coordination was slowing down development.
- Proactive Strategy: CEO Christophe Fouquet emphasized that ASML is choosing to “make these changes at a moment of strength” to sharpen its focus on next-generation engineering.
Geopolitical Headwinds and the China Factor
ASML’s record year was achieved in the face of tightening export restrictions. The Dutch government, aligning with U.S. policy, has limited the sale of high-end machines to China to prevent their use in advanced military systems.
- Market Pivot: While China accounted for a significant portion of sales in late 2025 (33% for the full year), ASML expects this to drop to approximately 20% in 2026.
- U.S. Influence: These measures are widely viewed as a strategic effort to curb China’s access to the world’s most advanced chip-making technology.
2026 Outlook: The AI Wave Continues
The outlook remains bullish. ASML expects 2026 to be another year of significant growth, fueled by the relentless demand for extreme ultraviolet (EUV) lithography systems—the only tools capable of etching the world’s smallest and most powerful AI chips.
“Many of our customers have shared a notably more positive assessment of the medium-term market… primarily based on more robust expectations of the sustainability of AI-related demand.” — Christophe Fouquet, ASML CEO
Why This Matters for the US Market
For American investors and tech firms, ASML is the ultimate bellwether. Because ASML holds a virtual monopoly on the machines needed to make cutting-edge processors, its record order intake suggests that the AI infrastructure boom is far from over. However, the shift toward leaner operations—even during record profits—may signal a new “efficiency era” for the entire semiconductor supply chain.
Takeaways
- Record Earnings: $11.5 billion net profit on $39.2 billion in sales for 2025.
- Workforce Reduction: 1,700 jobs (4%) to be cut to improve operational speed.
- AI Dominance: Record order intake driven by massive demand for EUV lithography.
- Geopolitical Shift: Expected decline in China revenue as export controls tighten.
