Synopsys Cuts 2,000 Jobs to ‘Drive Efficiencies’
Synopsys, the global leader in Electronic Design Automation (EDA) and chip design software, has announced plans for a sweeping corporate restructuring that will result in the termination of approximately 10% of its global workforce, impacting roughly 2,000 employees.
The decision, approved by the company’s Board of Directors, is primarily aimed at streamlining operations, eliminating functional overlaps, and accelerating investment into key growth opportunities following its massive $35 billion acquisition of engineering design firm Ansys earlier this year.
The restructuring, which will also involve certain site closures globally, is expected to incur significant pre-tax charges.
According to a regulatory filing on Wednesday, Synopsys anticipates recording charges ranging from $300 million to $350 million.
These charges will cover severance, one-time termination benefits, and other related costs.
A Quest for Synergies: Integration and Efficiency
The catalyst for the workforce reduction is the integration of Ansys. Synopsys acquired Ansys in a cash-and-stock transaction that closed in July 2025.
The strategic merger was designed to create a unified powerhouse in the chip-to-system design ecosystem, combining Synopsys’ expertise in chip design with Ansys’ strength in multi-physics simulation software for various sectors, including automotive, aerospace, and microchips.
However, merging two complex software portfolios and their corresponding organizational structures has necessitated a major operational overhaul.
The company stated that the layoffs are a necessary step to “drive business efficiencies” and “redirect investment toward higher-growth areas.”
Synopsys had an approximate employee count of 20,000 at the end of fiscal year 2024.
The company is seeking to realize the long-term value of the combined entity through a leaner operating model.
The majority of the workforce reductions are slated to take place during Fiscal Year 2026, which began on November 1st.
The complex, multi-jurisdictional process is expected to be substantially completed by the end of Fiscal Year 2027, indicating a protracted period of organizational change.
Initial reports suggest immediate impact on the company’s Sunnyvale, California headquarters, with a WARN notice listing cuts across engineering, management, legal, and IT roles slated for early next year.
Synopsys Financial and Geopolitical Headwinds
While the Ansys acquisition provides the primary structural motivation for the cuts, the decision also comes amid several near-term financial challenges.
These challenges have added pressure on the company.
In September, Synopsys missed analysts’ estimates for its third-quarter revenue.
CEO Sassine Ghazi attributed this performance to unexpected underperformance in the crucial Design Intellectual Property (IP) segment.
The IP business saw an 8% year-over-year decline in revenue, driven by two key external factors:
- China Slowdown: Tighter U.S. export restrictions on chip design software, despite being temporarily lifted in early July, caused customers in China—Synopsys’ second-largest market—to become cautious about long-term commitments, disrupting new design starts and future revenue realization.
- Major Foundry Customer Setback: The company encountered challenges with a major foundry customer. Synopsys had invested significant resources to develop specialized IP for this customer. Due to external market and client-related factors, the expected returns on this investment failed to materialize. This occurred in the latter half of 2025 as anticipated.
These headwinds, alongside the cost and complexity of the Ansys integration, signaled a heavier-than-planned strain on the company’s financial outlook.
This situation reinforced the push for rapid cost control and restructuring.
Broader Industry Context
Synopsys’ move places it squarely within a larger wave of job cuts sweeping across the U.S. technology sector in 2025.
According to reports from global outplacement firms, October marked the highest number of job reductions for that month in over two decades.
This trend was led primarily by technology firms recalibrating their workforces after periods of aggressive growth.
For Synopsys, the restructuring is a strategic pivot designed to ensure its competitiveness in the Electronic Design Automation (EDA) market.
It competes fiercely there with rival Cadence Design Systems.
By streamlining operations, the company aims to better focus its resources on high-growth technologies, particularly those related to AI and next-generation chip architectures.
These areas are seen as the future drivers of the semiconductor industry.
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