Synopsys to cut 2,800 jobs after $35B merger, 10% of workforce

Synopsys will eliminate up to 2,800 jobs — roughly 10% of its global workforce — following the Sunnyvale chip design company’s $35 billion acquisition of software firm Ansys, according to regulatory filings disclosed last week.

The layoffs represent another major blow to Bay Area tech employment, adding to a growing list of cuts that have hit companies like Meta in what’s shaping up as a challenging year for Silicon Valley workers.

Synopsys disclosed the restructuring plan to the Securities and Exchange Commission on Nov. 9, saying the board approved cuts that will primarily take place during fiscal 2026, which began Nov. 1. The company employs approximately 28,000 people globally.

“This restructuring will allow Synopsys to invest in key growth opportunities and drive business efficiencies,” the company said in its SEC filing.

The Sunnyvale-based company makes software used by engineers to design and test semiconductors, serving as a critical supplier to chip manufacturers worldwide. Synopsys completed its acquisition of Ansys, a Pennsylvania-based simulation software company, earlier this year in a deal that ranked among the largest tech mergers of 2024.

Synopsys expects to spend $300 million to $350 million on the restructuring, including severance payments and site closure costs. The company plans to complete the workforce reduction by the end of fiscal 2027.

“We are taking a number of targeted steps to improve our efficiency to scale the business, accelerate our strategy and capitalize on the highest-growth opportunities,” a Synopsys spokesperson said. “We do not take these measures lightly and are committed to treating impacted employees with respect and providing support through the transition.”

The cuts come as the semiconductor industry faces mixed signals. While demand for chips used in data centers and mobile devices remains strong, other sectors have cooled. Synopsys serves customers across automotive, aerospace, and consumer electronics — markets that have seen uneven growth over the past year.

For Bay Area workers, the Synopsys layoffs add to mounting job losses in the region’s tech sector. The cuts also underscore how even profitable companies are restructuring operations in response to economic uncertainty and the costs of major acquisitions.

State labor filings show Synopsys has already submitted multiple WARN notices to California’s Employment Development Department, though specific numbers for Bay Area facilities weren’t immediately available. The company operates several locations across Silicon Valley, including its Sunnyvale headquarters and offices in Mountain View and San Jose.

The timing of the layoffs coincides with broader business and economic pressures facing tech companies. Rising interest rates have made large acquisitions more expensive to finance, while companies face pressure from investors to show improved profitability.

Synopsys reported revenue of $6.1 billion for fiscal 2024, up 17% from the previous year. However, the company’s expenses also increased significantly, partly due to integration costs from recent acquisitions.

The Ansys deal marked Synopsys’ largest acquisition to date, nearly doubling the company’s addressable market by adding simulation capabilities to its existing chip design tools. Ansys software helps engineers simulate how products will perform under real-world conditions, from testing car crash safety to modeling airflow over aircraft wings.

Industry analysts had expected some workforce overlap between the two companies, particularly in administrative and sales functions. However, the scale of the cuts — representing 10% of the combined workforce — suggests deeper integration challenges.

“Post-merger workforce reductions are common, but 2,800 jobs is substantial,” said one semiconductor industry analyst who requested anonymity. “This indicates Synopsys found more redundancies than initially projected.”

The layoffs also reflect broader consolidation in the electronic design automation industry, where companies like Synopsys compete with firms including Cadence Design Systems and Siemens’ Mentor Graphics division.

For affected employees, Synopsys said it will provide severance packages and transition support, though specific details weren’t disclosed. The company’s SEC filing indicated that most cuts will occur during the first half of fiscal 2026.

The restructuring extends beyond headcount reductions. Synopsys also plans to close some facilities and consolidate operations, though the company hasn’t specified which locations will be affected.

Investors appeared to welcome the cost-cutting measures. Synopsys shares rose 3% in trading following the layoff announcement, suggesting Wall Street views the restructuring as necessary for long-term profitability.

The job cuts position Synopsys among several major Bay Area tech companies announcing workforce reductions this year. The layoffs highlight ongoing challenges facing even successful companies as they navigate economic headwinds and integrate major acquisitions.

Synopsys said it expects the restructuring to generate annual cost savings of approximately $250 million once fully implemented. The company plans to reinvest some of those savings into research and development, particularly in areas where Synopsys and Ansys technologies can be integrated.

For Silicon Valley’s job market, the Synopsys cuts add to concerns about tech employment heading into 2026. While some sectors continue hiring, the combination of high-profile layoffs and economic uncertainty has created a more challenging environment for tech workers across the region.