Synopsys to eliminate 10% of staff following Ansys integration

Synopsys said it would eliminate approximately 10% of its global workforce as the chip design software company integrates its $35 billion acquisition of engineering simulation firm Ansys. This move could affect up to 2,800 employees.

The Sunnyvale, California-based company disclosed the restructuring plan in a Securities and Exchange Commission filing on November 12, stating that the cuts would enable it to “invest in key growth opportunities and drive business efficiencies” following the Ansys deal, which closed in July.

The combined workforce totaled approximately 26,500 employees as of the companies’ most recent financial reports. Synopsys had about 20,000 employees at the end of fiscal 2024, according to the company’s annual report, while Ansys employed 6,500 people as of December 31, 2024, according to its 10-K filing.

The company said it expected to incur pre-tax charges ranging from $300 million to $350 million for severance, termination benefits, and site closures. The majority of workforce reductions were expected during fiscal 2026, with the restructuring substantially complete by the end of fiscal 2027, according to the filing.

Synopsys did not respond to requests for comment on which geographies or business functions would be most affected.

Strategic repositioning, not distress

“A 10% workforce reduction following a $35 billion acquisition sits at the upper bound of what we consider typical for enterprise software and semiconductor tooling deals, but it is not surprising given the scale and ambition of this integration,” said Sanchit Vir Gogia, chief analyst and CEO at Greyhound Research. “This is not a distress signal. It is a tightly controlled attempt to compress multi-year synergy extraction into the first 18 months of ownership.”

The restructuring positioned Synopsys more competitively against rival Cadence Design Systems, Gogia said. By combining chip design automation, semiconductor IP, and multiphysics simulation, “Synopsys can now offer enterprise customers a unified path from transistor design to full system digital twins,” he said. “This shifts the competitive dynamics decisively.”

The Ansys acquisition, first announced in January 2024, expanded Synopsys’ total addressable market from $19 billion to $31 billion, according to the company. The deal faced months of regulatory scrutiny in the US, the UK, and China before coming to a close in July.

Impact on customers

The workforce reduction raises questions for enterprise IT leaders about product roadmaps and support continuity during the Synopsys-Ansys integration. The combined company served customers including Intel, AMD, and Nvidia for chip design tools, and Tesla, SpaceX, Boeing, and BMW for simulation software, according to company materials.

Synopsys said on its corporate website that all Ansys tools would remain fully supported and that existing customers would not face forced migrations. Materials on the website said the company expected to deliver its first integrated capabilities in the first half of 2026, focusing on multiphysics simulation for multi-die chip packaging, a critical technology for AI accelerators.

“CIOs and engineering leaders should prepare for an integration that is firm in direction but deliberate in execution,” Gogia said. Customers should expect both product families to remain intact with roadmaps “stitched together progressively rather than force-merged,” he added. Early integration would appear as tighter connections between electronic design automation workflows and physics simulation tools, particularly for advanced packaging and thermal analysis.

On pricing, Gogia said CIOs should anticipate bundle offers and multi-year incentives in the short term. “Longer term, once integrated workflows demonstrate measurable productivity gains, the company will feel justified in raising prices on high-value suites,” he said, advising CIOs to lock in multi-year price protections before new bundles become standard.

However, Gogia cautioned that a broader platform “magnifies the leverage of the vendor and increases the cost of switching.” He advised CIOs to enforce stronger governance on data portability and maintain competing toolchains for critical design steps.

Broader industry realignment

The restructuring came roughly two months after Synopsys’ stock plummeted 35% following a third-quarter earnings miss. The company reported $1.74 billion in revenue versus analyst expectations of $1.77 billion, according to earnings materials filed with the SEC.

The announcement followed a broader wave of tech industry layoffs, with US employers cutting more than 150,000 jobs in October alone, according to outplacement firm Challenger, Gray & Christmas.

Gogia characterized the 2025 wave of layoffs as “a structural realignment rather than a sign of industry decline.” Companies were recalibrating for an era in which AI and automation reshaped labor requirements, he said, removing layers of management and consolidating duplicated teams. “The deeper signal is that technology vendors are positioning for an AI-centric decade,” Gogia said. “They are reallocating resources from slower growth or legacy units into AI-infused engineering, cloud infrastructure, and system simulation.”