Wolfspeed layoffs at its Siler City materials factory

Weeks after an announcement that it is preparing to file for Chapter 11 bankruptcy, Durham-based Wolfspeed is laying off 73 workers from its new materials factory in Siler City, Chatham County.

Wolfspeed manufactures wide-bandgap semiconductors focused on silicon carbide and gallium nitride materials, including microchips. General Motors and Mercedes-Benz are among its customers.

A Worker Adjustment and Retraining Notification (WARN) notice on the North Carolina Department of Commerce’s website shows the job cuts were announced on June 9. The layoffs will occur on Aug. 9.

The WARN Act requires employers with 100 or more full-time employees (not counting workers who have fewer than 6 months on the job) to provide at least 60 calendar days advance written notice of a worksite closing affecting 50 or more employees, or a mass layoff affecting at least 50 employees and one-third of the worksite’s total workforce or 500 or more employees at the single site of employment during any 90-day period.

Last month, the company announced it was pursuing a prepackaged Chapter 11 plan, after its largest backer refused multiple attempts by creditors to restructure its debt out of court.

Chapter 11 is a common bankruptcy that allows distressed companies to continue operating while their businesses, debts, and assets are reorganized.

“Prepackaged” means the company would file a plan it agreed upon with its creditors.

In October, Wolfspeed secured a $750 million financing deal with Apollo Global Management, an investment firm, according to TipRanks, a website that provides stock analysis and breaking news in the financial world by aggregating and analyzing data from various sources.

$750 million in federal funding

That same month, the Biden-Harris administration announced that it had signed the initial agreement for up to $750 million in federal funding to support the construction of a new $5 billion silicon carbide wafer manufacturing facility in Siler City, North Carolina under the CHIPS and Science Act. The company said it planned to hire 1,800 workers at the site.

But, the company has not received any of the funding because it was contingent on Wolfspeed refinancing its convertible notes maturing in 2026, 2028, and 2029.

According to TipRanks, the silicon carbide chipmaker has roughly $6.5 billion in debt, while its cash and cash equivalents balance stood at $1.3 billion as of March 31. Apollo Global, which has led restructuring negotiations in recent weeks, holds $1.5 billion in senior secured loans, and would be paid back first under the Chapter 11 agreement.

The group has the right to approve any new secured financing and was also responsible for rejecting all restructuring offers in March. According to TipRanks, those deals included a provision for Wolfspeed’s largest lender, China’s Renesas Electronics, to convert some of its outstanding convertible notes to equity.

layoffs and dropping revenue outlook

The company recently notified investors about its “growing concern” risks and cut its 2026 revenue outlook to $850 million, significantly below expectations.

Wolfspeed had about 5,000 workers worldwide last summer, with the majority in the Research Triangle area.

However, the company began to show troubling signs in November when it announced that it was reducing its workforce by 20%, with most of the layoffs coming from its Durham location. With more layoffs, buyouts, and attrition, that figure now stands closer to 25%.

In a report to investors about its earnings for the first quarter of 2025, the company announced a loss of $282.2 million in its first fiscal quarter.

The job reductions are part of the announcement in August that the 150mm production facility in Durham would close, as well as a facility in Farmers Branch, TX, and plans in Germany would be suspended indefinitely.

Former Wolfspeed CEO Gregg Lowe said in a statement that the company took action in FY 2025 to solidify the capital structure, simplifying their business to accelerate structural profitability and support the build-out of their state-of-the-art silicon carbide facilities, including a 200mm silicon carbide footprint at its Mohawk Valley location in New York and North Carolina materials factories that he says will generate approximately $3 billion in revenue annually.

The company fired Lowe shortly after the announcement. Robert Feurle was named to the position on May 1. Chief Financial Officer Neill Reynolds is also reportedly leaving at the end of this month.

jdig grant under cooper

A continuing trend showing a decline in the demand for EVs, especially in the US and Europe, has also not helped the company.

Wolfspeed is funded by a Job Development Investment Grant (JDIG), reimbursed under the Economic Development Project Reserve. During former Democratic Gov. Roy Cooper’s tenure, and in the 2021 budget (2022 adjustments), the reserve fund allocated $57.5 million for site development to Wolfspeed.

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