According to the German Trade Union Confederation (De Unie), ASML and the union have reached an agreement on a social security plan covering the company's ongoing restructuring. Earlier this year, ASML announced plans to lay off 1,700 employees, citing an inefficient and overly complex organizational structure.

Under the agreement, employees will not face mandatory layoffs before May 1st next year, thus gaining a period of job security during the restructuring process. The agreement is valid for two years and will be retroactive to June 1st, meaning its terms have already taken effect from that date.

Employees already on the layoff list will have the opportunity to apply for vacant positions within ASML before the end of the non-layoff period. The company stated that this internal relocation process is expected to save hundreds of jobs.

The arrangement was initially agreed in principle last month with the unions FNV, CNV, De Unie, and VHP2. After receiving majority support from ASML union members, the arrangement has now come into effect.

The agreement has not only received support from Dutch unions but also from the Belgian union ACV. Support was high among CNV members, with nearly 70% of voters approving the agreement.

This restructuring primarily affects positions in ASML's Research & Engineering (D&E) and IT & Data departments. As part of the reforms, the company is cutting more than 3,000 of its 4,500 technical management positions, aiming to flatten the organizational structure and reduce management levels.

Under the agreement, employees whose jobs are not threatened can choose to leave voluntarily so that colleagues facing layoffs can remain with the company. Employees leaving under this arrangement will receive 80% of their original severance pay.

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Union criticizes ASML for layoffs during its expansion plan

Earlier this year, the CNV union expressed "utter shock" at ASML's plan to lay off 1,700 employees. The Feldhoven-based chip equipment manufacturer announced the news on Wednesday, coinciding with record revenue for the previous year. The union called ASML's explanation "very unclear."

The CNV union likened ASML to a "very hungry caterpillar." CNV negotiator Ajan Hujinga stated, "The money is flowing in steadily, and the future looks bright. However, to further improve profits, they clearly feel the need for layoffs. The company's goal is to prioritize engineering and innovation, but in this process, 1,700 employees, most of whom are process managers, are seen as obstacles. This shouldn't be the way to treat employees."

At the time, ASML announced layoffs, citing inflexible operations. Chief Financial Officer Roger Dassen stated that engineers were spending too much time on tasks unrelated to innovation. The company currently employs over 44,000 people.

ASML's plans to hire approximately 20,000 more employees over the next few years have further exacerbated the union's confusion."The company anticipates significant growth over the next few years and plans to expand its workforce, yet it's laying off so many people. It doesn't make sense,"Huizinga said.

ASML is discussing the layoffs with its employee council and union, while CNV is advocating for a "comprehensive and equitable social program."

The union, FNV, expects the social welfare plan to be brief. "It can be summarized in one page: no forced layoffs," said union negotiator Peter Reiniers. The union will meet with ASML on Wednesday afternoon, and Reiniers is eager to understand the reasons for the layoffs.

FNV dismissed the chipmaker's claim that the company structure was too rigid. "They set it themselves. The company is performing strongly, and they can't just lay off people arbitrarily," the union argued.

Source: Compiled from nltimes

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