Can someone explain, why this is done? I get a feeling, it's normally done when a company is in trouble or will soon? But they should have more money than ever.

They say it is to focus on innovation, but if you are a smart young person in NL, would you want to work where they just fired 1700 people? And if you already work there and are a top player it is a good time to rethink? A company I know wanted to focus, instead of firing, they sold the parts of the company they felt did not fit their future vision for money.

Actually, they are eliminating 3000 of the 4500 engineering manager positions. However, of those 3000, they are moving 1400 to an engineering position. The article also says that engineers are spending 35% of the time coordinating with their managers and that they want to cut the red tape with this move.

Of course, it's hard to tell how much is PR and how much reality. However, if there is substance to it, it would want me to work there even more, since they value engineering culture over management culture. Having more velocity is good.

I think the press release is actually clear that they felt this was necessary to retain talent:

> Engineers in particular have expressed their desire to focus their time on engineering, without being hampered by slow process flows

I'm guessing ASML had a lot of regrettable attrition and heard this in the exit interviews.

> would you want to work where they just fired 1700 people

Firing 1700 managers is somewhat different than firing 1700 ICs. Whether managers will want to work there is an open question, but quite a lot of ICs will see the trimmed management layer as a good sign that they'll be free to get shit done

It is done because management needs to show that profits are increasing or they themselves will lose their jobs. Since they do not want to lose their jobs and they do not know how to increase profits they decided to fire 1700 employees with the hope that less expenses will translate into larger profits.

They've also done another thing:

>ASML also announced a new share buyback programme of up to €12 billion, to be executed by 31 December 2028.

They have €12 billion they don't know what to do with with so they will give it to shareholders, for a nice gain of less than 1% per year for the next 3 years. Assuming the annual salary costs of each of the 1700 employees is 150K (likely much much lower) those 12 billion could have paid for their employment for the next 47 years.

They trimmed the managerial layer. A smart young person isn't immediately affected by it and (at least to me), this signals focus on actual work and flattening of the structure of an organization.

I worked for a company that went through 2 cycles like this and I can report that it had zero effect on us engineers.

My impression was that people were constantly being promoted into management and at some point we just had too many managers and that's why it was done. Of course, when you know this, the question becomes: why allow things to get to this point in the first place?

It sounds like:

Layoff --> increase short term valuation --> increase value per share --> owner of shares happy during buyback.

After, it's true that having a lot of middle management can slow things down. On the other side, they could have indeed created new entities, new projects, re-qualify employees,...

One reason, maximizing investor value. CEO and executives usually get bonuses after layoffs.