ASML Cuts 1,700 Jobs Despite Record Profits to Fight Corporate Bloat
Veldhoven, Saturday, 14 March 2026.
Dutch semiconductor giant ASML eliminated 1,700 positions in January 2026 after earning €10 billion in profits, with Technical Director Marco Pieters declaring the company had become ‘sluggish’ and wasteful. The restructuring affects 4,500 managers who must reapply for positions as ASML streamlines its 16,000-person engineering division. Pieters admits the company lost efficiency through excessive meetings and bureaucratic processes during rapid growth, contradicting typical corporate logic of hiring during boom periods.
Strategic Timing Behind the Reorganization
The reorganization announcement came at a pivotal moment for ASML, coinciding with significant expansion approvals and the company’s positioning for the artificial intelligence era [1]. During the week of March 10-14, 2026, the Eindhoven city council approved ASML’s expansion plans, with Noord-Brabant province granting an exception to nitrogen permit requirements [1]. This timing underscores ASML’s dual approach of expanding physical capacity while simultaneously streamlining internal operations. Marco Pieters, who became technical director in November 2025, had already been working on transforming the Development and Engineering department for a full year before officially taking the role [1]. The restructuring represents ASML’s response to what Pieters describes as becoming “stroperig” - a Dutch term meaning sluggish or syrupy - over the past two to three years [1].
The Scale of ASML’s Engineering Challenge
ASML’s Development and Engineering department employs 16,000 engineers and technicians working specifically on lithography machines, making it one of the largest concentrated engineering forces in the semiconductor industry [1]. The reorganization’s scope becomes clear when considering that 4,500 ASML managers must reapply for new positions under the restructured organizational model [1]. Pieters acknowledges that rapid growth created inefficiencies, stating that “not all processes and ways of working have grown along with us, and we waste a lot of time in meetings” [1]. This bureaucratic bloat emerged despite ASML’s critical role in the semiconductor supply chain, where the company’s extreme ultraviolet lithography tools are essential for manufacturing advanced chips [3]. The company’s machines are particularly crucial for AI chip production, which requires massive computing power dependent on these advanced semiconductors [4].
Innovation Through Advanced Packaging Technology
Beyond organizational restructuring, ASML is expanding into advanced packaging technology, a relatively new area that represents significant growth potential [3]. The company introduced a new machine in 2025 specializing in advanced packaging lithography for AI chips, requiring micron-level accuracy instead of the nanometer precision traditionally associated with ASML’s equipment [1]. Memory chip manufacturers are currently testing ASML’s €400 million EUV machines for high bandwidth memory production, which consists of stacked cells reaching up to sixteen layers [1]. This technology addresses the surging demand for computer memory in AI applications, where processing requirements continue to escalate [1]. Pieters uses the analogy of a skyscraper to explain chip value creation, noting that “the higher the tower, the greater the profit if you make one downsizing move” [1].
Future Technology Development and Market Position
ASML’s newest EUV machine, designated ‘High-NA’, stands ready for mass production of next-generation processors, offering higher precision while reducing production steps [1]. The company’s engineers are already developing an even more advanced Hyper NA machine for greater precision, though its development timeline depends on chip manufacturers recognizing the value proposition of finer lithography capabilities [1]. ASML’s High-NA EUV lithography technology can double chip resolution from 13 nanometers to 8 nanometers per exposure, enabling 2.9 times more transistors per chip while processing 175 wafers per hour using 12 tons of precision optics [5]. This technological advancement directly supports Moore’s Law, which states that circuit density on chips doubles every two years, and remains fundamental to continued AI scaling [1][5]. The company’s strategic focus on scaling down chip patterns maintains its position as the critical enabler of semiconductor advancement, making ASML indispensable to the global technology ecosystem.