Synopsys announced on November 12 that it will reduce its workforce by about 10%, or roughly 2,000 employees, as part of a restructuring plan that was filed with regulators on November 9. The plan is designed to streamline operations and free up capital for high‑growth areas.
The company said the cuts will allow it to redirect investment toward growth opportunities, particularly in artificial intelligence and advanced node technologies. The announcement follows the July 2025 acquisition of Ansys, a $35 billion deal that expands Synopsys’ capabilities from silicon to system‑level simulation.
Synopsys’ most recent quarterly results, for the third quarter of fiscal 2025, showed revenue of $1.740 billion, up 14% year‑over‑year, driven by strong demand in its Design Automation segment. However, GAAP earnings per share fell to $1.50 from $2.73 in the same quarter a year earlier, and non‑GAAP EPS slipped to $3.39 from $3.43. The company reaffirmed its full‑year revenue guidance of $7.03 billion to $7.06 billion.
Segment analysis revealed a sharp decline in the Design IP business, whose operating margin dropped to 20.1% from 36.7% a year earlier and revenue fell 8% year‑over‑year. In contrast, Design Automation maintained a healthy margin and contributed the bulk of the revenue growth. Management cited headwinds in the Chinese market and challenges with foundry partners as key factors behind the IP segment’s weakness.
The restructuring plan estimates severance and related costs of $300 million to $350 million. Most of the workforce reductions are expected to take place during fiscal year 2026, with the plan slated for completion by the end of fiscal year 2027. The company expects the cuts to lower operating costs and enable a sharper focus on integrating Ansys and accelerating its AI‑powered EDA solutions.
President and CEO Sassine Ghazi said the quarter was transformational, noting that the Ansys acquisition had expanded Synopsys’ portfolio and that the company is now better positioned to serve AI‑driven chip design. Spokesperson Cara Walker emphasized that the company is committed to treating affected employees with respect and providing support throughout the transition.
Investors reacted negatively to the earnings miss and revenue shortfall, with analysts pointing to the underperformance of the Design IP segment and ongoing headwinds in China as primary concerns. The workforce reduction is viewed as a strategic response aimed at restoring profitability and positioning Synopsys for long‑term growth in AI and advanced node markets.
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