Shares of ASML slid 4.3% to $1,396.42 on April 22 — sharply diverging from a rising market — after internal documents revealed the chip-equipment giant is deepening its management purge and imposing a six-week summer hiring freeze. The layoffs are part of a broader push to simplify its organization and improve efficiency, according to internal documents reported by Business Insider on April 21. The selloff signals investors aren't sure whether this restructuring is smart surgery or a sign of deeper operational dysfunction at a company the entire AI supply chain depends on.

  • The Cuts Target Bosses, Not Builders — And That's the Point. Several leadership and coordination roles will be eliminated, including department managers, group leaders, team leaders, project leads, scrum masters, and program managers.

The company plans to create about 1,400 new engineering jobs to support growth , making this a deliberate swap: fewer people managing, more people building. ASML employs about 44,000 people worldwide , so the 1,700 cuts represent roughly 4% of headcount — modest in absolute terms but radical in targeting an entire management layer.

  • Record Profits Make These Cuts Harder to Explain. ASML achieved record quarterly orders of €13.2 billion in Q4 2025, far exceeding expectations, with full-year revenue of €32.7 billion and net profit of €9.6 billion, up 26.3% year-over-year.

The profit margin rose to 52.8% for the full year — a level most industrial companies dream of. That's precisely why the market is uneasy: restructuring during a boom implies the internal machine is broken, not just expensive.

  • A Walkout and Union Pushback Add Execution Risk. More than 1,000 workers staged a walkout at ASML's Veldhoven headquarters.

Both main unions rejected ASML's April 1 reorganization deadline as "unrealistic." Prolonged labor friction could slow deliveries of the company's irreplaceable lithography machines — tools with years-long lead times that customers like TSMC and Samsung cannot source anywhere else.

  • China Revenue Headwinds Lurk Behind the Efficiency Push. China's share of revenue is projected to fall from 33% in 2025 to around 20% in 2026 as U.S. export controls restrict sales. Losing that revenue cushion makes cost discipline existential, not optional. ASML's 2026 revenue guidance of €34–39 billion requires flawless execution to hit the high end — exactly the kind of performance organizational upheaval can undermine.

The bottom line: ASML is betting it can flatten a bloated bureaucracy without tripping over its own restructuring. With a €39 billion order backlog and no competitors in advanced lithography, the strategic logic is sound. The question is whether the short-term disruption costs shareholders more than the long-term efficiency gains.