I'm impressed by their ambition to fire 1700 managers(!) That's a lot of managers! I interviewed with ASML a decade and a half ago and while there was plenty to complain about (eg their tens of millions of lines of absolutely unmaintainable C code), I didn't feel at the time feel like it was a very top-heavy organization. It was very engineer-y, and I loved that about them. This press release (when taken at face value) suggests that this has changed a lot over time and they're now trying to correct it.
I gotta say, if true and not code for general "cheese slicer" cost cutting, I think that this is rather ballsy. Philips (which ASML spun out of) famously never did anything of the sort and gradually cramped into an extremely management-heavy organization where most people just write reports for other people with scary few people actually moving the needle. I think it's cool that ASML has identified that they're risking becoming like Philips and trying to do something about it, even if the method seems rather crude. I think the risk is real. ASML's fast-moving culture formed in a mad multi-decade survival-crunch, but they've been a near-monopolist for a while now and that means those pressures are long gone.
You see the same pattern with Siemens and a lot of their spinoffs: Continental(VDO), Infineon, Qimonda, Gigaset, Healthineers (yes, that's a real name that somebody got paid to come up with), etc
THe ones without some major moat like trains or energy, got slowly run into the ground becoming irrelevant or stagnant, or ended up being shuffled between various foreign PE groups as they couldn't make them profitable.
Bizarrely, even Healthineers which should be booming due to healthcare being a super profitable industry with a massive regulatory moat, has hit a 5 year low in its stock price.
Remember how Siemens used to make mobile phones? Yeah, well ironically, Apple's in-house modems are the former cellular modem division of Siemens-Infineon that Intel bought and then sold to Apple.
There's something with the management from these massive German conglomerates that just lacks any sort of vision, and over time end up producing bloat, inefficiency, bureaucracy and stagnation while the same staff ends up flourishing and producing top notch tech when under a US company like Apple. Wondering if it's what they teach in business schools over there or if it's the culture, or both.
I almost cry at work from sadness. So much potential wasted, the company has great market access and still good name. Polishing old products would make this hockey stick revenue growth. But with management explosion everything is being wasted. Meetings about meetings, no product upgrades and total stagnation. While managers fight over parking spots near front door for VIPs.
Germans just don't seem to get that successful SW was built by empowering the geeks working in "the trenches", and not by suits with business degrees in running conveyor belt assembly factories where everyone is a fixed cog that needs to follow a strict process thought out by someone above them.
Their original roadmap for their next gen products was not good and the product was getting delayed by a few months.
They brought in a new manager to fix the timeline. Instead she increased the bureaucracy. OKR tracking every other week. Hired a scrum master. Brought in external "certified code reviewers", delayed the project a little more and ended up cancelling the project within a couple of months. "Hardware products are not as profitable as proprietary cloud software as a service company anyway".
That's another big issue with Germany, is they obsess over certifications when hiring, as if they're some confidence of high quality hiring bar, when a lot of those certifications and degrees in the IT industry are just scams.
I think it's caused by the fact that firing a bad hire is super difficult past the probation period, and since HR/recruiters are clueless on screening what makes a good SW dev, so they just go with filtering for credentials to cover their asses, in case of a bad hire they can say they followed the process and screened for the ones with credentials.
A bad "Zeugniss" could leave you out of the work market for years, and all is needed for that is a boss that does not like you. Moreover, you can only understand that the document implies you are not good by decoding it with special tools in internet.
They just want to check that you actually worked where you said you worked in your resume, and today you have other official governmental digital records you can pull to prove that.
I remember at one company I worked they had figured out how to get a project back on track: standups twice daily and justifying everything you did in the few hours before.
That's what you do if your goal is to blame developers for the project failing, and you double-down on management to underline the root cause as developers going off rails and thus the fix is to reign them in with management. The managers jumping on board have no downside as the project was either doomed or they flexed their superior management skills to revive the project.
It's a universally hard tendency to resist as enterprises grow into big organisations.
Company starts small and lean; people involved in making product also do most of everything else. Over time specialist HR, Finance, Legal, Marketing etc functions are added. All try to do their best but all with their own non-product agenda. All usually hired and sitting at or close to the same top table decision making process, all diluting and distracting from the vision/mission of what was important to the organisation in the first place. Eventually, the company's top-level decisions becomes more about that than the product.
Apple orders a widget from them which can be sold in an established product with existing customers. The magic was creating the Apple brand and iPhone product.
I think the problem with old European "conglomerates" is that no one has the mandate/legitimacy to make a multi-year/decade tech investment equivalent to the iphone. "Decision makers" are likely to have been promoted from other professions than engineering/products, and people promoted through management/sales lack competence and legitimacy. Their job is to apply old and approved templates for decision-making, while paying dues and respect to appropriate people.
It fails when templates for decision-making don't exist. Spin-offs or acquisitions based on new tech, rather than existing products/markets, can't work with this type of management.
I have also gotten the sense that management positions are given as rewards for "long and loyal service". It is effectively an incentives program, with the implicit assumption that management decisions don't really matter. This is not far from the the truth in old industrial companies with few but huge returning "captive" customers, which is typical in Europe eg Siemens, or high value luxury brands in fashion/jewellery/liquor/etc.
The meaning of the word "verwaltung" is different from the American "management". Verwaltung implies "preservation of stability" whereas "business management" implies something like "figure out how to sell more stuff".
I love the name! It makes me laugh!
Might not be the branding they were going for, but they should lean in. Lot's of spontaneous singing and dancing. :)
Sorry for the tangent, I haven't heard this name in over 15 years, I interviewed with them the summer before the final year of my BEng, and was offered a job in China to allegedly built a real-time voice/video communications system between what they said were their three facilities in beautiful looking part of China I can't remember the name of now.
Looking through my Gmail, it was 2008 they offered my the position; and looking at the Wiki page, I'm glad I didn't take the offer, as it appears it didn't last much longer?
Funny how China has the vision to use, finance and monetize where western governments keep failing.
That's what hurts the most to see. EU says they want a strong domestic electronics industry, but with the exception of ASML, they really don't do nearly enough to grow it or even to maintain it.
It's really quite interesting thinking back to that time for me in University, every few years something happens that sparks a memory; right now, it's that roughly 2007-2008 my professor was telling me about this "rollable" screen technology that was going to enable rolling/folding phones at some point in the future; a little earlier he'd been telling me about this funky new thing called 'Organic LED' that was going to enable "printing" flexible circuits
He's an FREng (Fellow of the Royal Academy of Engineering) and was one of the people involved in the invention of the silicon chip.
Had a Gandalf look to him and was a real fountain of knowledge, I lucked out to get the guy as my professor.
Our 4 years terms is short slighted by design.
That's not a trait of a monoparty system, or even any totalitarian autocratic system. There are democratic multiparty systems which have plans that spans decades, and autocratic totalitarian regimes that barely put together a coherent multi-year project.
Like for example the French government massively supported its aerospace and nuclear industry, and German government gave massive support to its legacy auto industry and they're not a mono party totalitarian system.
So it can be done even in democracies, but you need visionary leaders to spend money wisely on future industry bets and not just on buying votes from pensioners.
The big issue EU now has compared to the past when it kickstarted its nuclear and aerospace industry, is the massive burden of the welfare state that leaves little money for investments into other ventures, and boomers who are the largest beneficiaries of that welfare state, also account for the majority of the voter base, so the major EU economies France and Germany are stuck in a quagmire where the party who wins the elections is the one who goes more into debt for the welfare state.
What I mean by the former is we shouldn’t, for example, be bailing out cruise lines.
Countries/cities/counties are often 4ish years.
XI has been the head of the CCP for 14 years
Today we have a shortage in this sector and margins are good so it seems like a good idea. But it's likely a European company would have regularly lost money over the last 20 years and become an unpopular drain on EU finances.
Well, you can apply this logic to a lot of other industries, like cars for example, they're also quite low margin products now when you ignore the stealership price gouging and artificail protectionism. The problem is if you just let all your manufacturing industry die out of greed and ship it aboard to cheaper labor, you're leaving yourself exposed to geopolitical rivals or even to allies who decide not be your allies anymore because they know they got you by the balls now and can squeeze concessions out of you. <flashbacks of EU's energy ties with Russia>
Then what do you do?
China is willing to play and loose the short game in order to win the long game, while EU is only focused on the short term gains while it's been slowly bleeding leverage and influence to rivals in critical sectors that you can't easily reshore back on a whim in case of another once-in-a-lifetime pandemic or "special military operation".
China's EV success didn't come out of nowhere, it just leveraged all the low margin electronics industry the west didn't want anymore and shipped to CHina, and look at their EV industry versus the EU one today.
Same with Taiwan's success in the semi industry. They started by manufacturing on the cheap dated processes acquired from Philips and RCA, and look at TSMC now.
We're not talking about outsourcing manufacturing of cheap clothes and sneakers here. DRAM, NAND and micro-electronics in general is quite an indispensable part of or modern civilisation and defense now, even without the AI bubble. The longer you ignore your domestic capabilities because the profits aren't as high as you want, the harder it's gonna bite you in the ass later when the shit hits the fan.
I felt OP was suggesting that a European manufacturer would have flourished if properly supported by a visionary government, and I think that argument is mistaken.
You are arguing that globalised supply chains are risky, which is something I can agree with. If europe protects its DRAM manufacturer it is going to be less reliant on China but we should not confuse that with the European company flourishing. It seems likely such protection would be an expensive venture which absent any global conflict would produce more expensive products and make a loss while doing so.
I never argued for protectionism since Chinese DRAM makers and EV industry also didn't grow out of protectionism. On the contrary, they invited Tesla to build a EV factory in Shanghai without the usual 51% state ownership simply to light a fire under the asses of Chinese domestic EV makers on an even playing field with Tesla forcing them to innovate to Tesla's level or die.
I was arguing for positive state management like that, not protectionism. The kind of state management our aerospace industry had.
China is going through the burgeoning phase previous countries have gone through. Although China’s scale is far larger, once there’s a couple of economic troughs things will be different.
Some actual problem solving at the top, communicated in a way that makes sense, instead of waves.
To get dangerously close to political topics: I love Pete Buttigieg for being a wonk but likable and understandable. And cool as a cucumber. All that is so rare, when it should be pervasive.
(Whatever his other pros or cons - I am not an expert on him.)
More of that, please.
I really hope that other German enterprises will use this as an example.
Sweden has quite strong labour protection but can be much more innovative than Germany because there's much less emphasis in respecting titles, seniority, and authority than the Germans. German education has a big emphasis on bowing down to authority from early age, Sweden is much more lax (and even though Jantelagen isn't a big thing in modernity it still can affect modern Scandinavia in general).
Blaming labour laws for issues arising from culture is a tired jab, it's not the culprit. You can find that out by working for a German company vs a Swedish one, it's starkly different.
Ah, good ol' legacy of the education system implemented by Prussia, who wanted an army of conformist soldiers following orders, and not free thinkers risking to upset the apple cart. Great mentality if all you want is waging war though :)
And this mentality persist to this day, where given a set of rules, other successful related cultures like Dutch, Brits or Swedes will first use common sense when interpreting and applying them, whereas Germans will tend to blindly follow those rules by the book even if they don't make sense in that specific context.
It's difficult to uproot people from their ways, when they've only lived in Plato's cave allegory.
Arguably not; in the end it produced a brittle general staff who could not accept that they needed to rethink all their war plans based on the political constraints of time (ironic since Clausewitz came out of that exact tradition).
These are people who primarily create work for themselves and each other. I have sat in meetings about meetings for actions that, ultimately, have zero impact, in teams where managers involve outnumber people who actually execute anything three to one. It's staggering.
I believe the best way to kill a company is to have middle management beyond the absolute minimum you might need.
So, ASML is extremely on point here.
There are daily syncs for things that take weeks to do due to compliance, endless war rooms to solve things that would be done offline in half the time, and random bullshit process and committees introduced by management which generate even more meetings...
It's common all over the world, motion instead of progress. It's incredible to me how all those companies don't realize where their money is spent. But alas you cannot make people see a problem if their salary depends on it, and I may be no different.
Think of a dev paid $250k/yr that comes up with a clever database scheme that saves the company $5m/yr in cloud costs. If nothing else, the company is in the green for years on that investment in that dev even if the dev just piddle paddles along with small fixes 99% of the time.
The part that sucks though is the general optics of these positions. Humans just instinctively want to correlate high pay with high busy work load, rather than high pay with high impact, which is how it actually works.
And another layer I've seen frequently - people somehow need to make their work meaningful to make it part of their core identity, even if its literally moving one pile of dirt to next pile and then reverse, or just adding friction to progress. Strong ego game.
As an engineer who 'jumped' to middle management: yes. 100% yes.
It's kinda disheartening and also a little bit insane to sit in a room with 12 people who learned CISSP and ISO27001 by heart but could not explain what SSH is or what a container does.
Everything has to first be abstracted away from tech into 'risks' and then 'controls' and then these controls have to be re-translated into actual changes in IT systems.
However, at every layer and every abstraction so much detail is lost that they're essentially steering blind.
Last week one of them suggested that we should whitelist the entire IPv4 range of AWS to allow some SaaS (Jira?) to connect to our internal Git.
The policy said to do whitelisting and so they all approved it until I challenged it.
Crazy to watch and honestly so disheartening that I might go do something else. Trying to affect change feels like leaning against a wall.
I think it's just a symptom. As a manager, you contribute nothing by yourself. You are useful if you have a useful team (ICs) with a good project. To have that, you need to defend yourself against other managers who will take this from you. If you then also want to get prompted, your task is also to vacuum in all sorts of soft power, visibility, decision rights and being-in-the-roomness. It's even efficient, in that case, to destroy efficiency with processes (under your involvement)
As an IC, you are always valuable as you can always create value.
Hence, by having enough managers, you ensure that their competition will destroy the company.
IC's do benefit from coordination, as any team might. That is management. However, having more than the absolute minimum of managers and management attached to a product invariably means an exponential decrease in efficiency.
Any team with more managers than senior ICs such as staff engineers is in trouble. That's because staff+ engineers are the people who's ACTUAL job it is to give direction, force multiplication and avoidance of local minima.
Hence, the nature of the position of manager is that it is very often unnecessary, or only intermittently useful. Therefore, a successful manager is not one who makes the product succeed, but rather someone who creates work that they themselves can and need to solve. Typically, this happens when there is a group of managers where there should be only one.
Emphasis on the well-managed. If the management actually helps the tram achieve their goals and doesn't stifle them, then great. Otherwise, you end up with bloat.
ASML has 44,000 staff total, not sure how many are managers, but the 1,700 number does not strike me as particularly ambitious for a reorg in a company that size.
Middle management has this self-replicating dynamic of becoming bloated and inefficient. Most companies probably do not have good middle management, because they have too much of it.
I'm not the reason my teams need to do software supplier risk assessments, or fill in at least 4 different surveys about their wellbeing and functioning as a team, or provide forecasts of their cloud spend for the year, or manage data usage agreements for the consumers of their data in our data lake. Nor is my people leader. But I am accountable if we don't stay on top of these responsibilities which are expected of all teams.
1700 managers is a lot, but also, it's a huge multinational so I'm not surprised they have that many. They will be alright I'm sure - one, if there's any forced firings they will be well taken care of under Dutch labour laws, and two, ASML will look very good on a CV.
Yes. Notice period stays in tact. Transition payment is 1/3rd of a monthly wage per year worked. And then your unemployment runs for up to 24 months at 70% of your income capped at €4500. Unemployment benefits are unconditional until you find a new job.
They are quite conditional: you must be applying for a new job while receiving them, and after the first six months any job you can do is eligible (not just the jobs you would want to do). You must report your job applications to the unemployment agency, and you can get called in and cut off from benefits for not earnestly seeking a job.
But they are unconditional in that they are not means tested or have other clauses that could cause you to not get paid. You do not have to eat your savings, house or car. You are allowed to keep those.
Yes, the UWV [1] unemployment benefits are not perpetual (I don't recall the exact formula used to calculate the eligibility length). But even after your unemployment benefits stop, depending on the level of your savings, you may be eligible for receiving other benefits (e.g. health insurance and rent).
Overall, it is a very pro-worker system, with the major benefit of it being not "free money" (as US readers may assume), but the decreased leverage your employer has over you.
> Overall, it is a very pro-worker system
Having had to deal with parts of the Dutch system, I'm positive it's rigged against you. And you pay for it, it's literally a tax (WW premie, part of the "werknemersverzekeringen" aka employees insurance).
It's in a somewhat comparable job but without regard for payment level or educational/promotional equivalence so you have to accept lower pay. The most extreme is a temp job but you have to be far gone to get there and even then there are limits.
Also, switching from a desk job to a physical job (which in this case is very physical) is not something the UWV (the goverment part which handles this) will try to bring up to a judge if you refuse as Dutch law has a "reasonability" principle and you can very easily argue that would be unreasonable.
The again, this is the UWV we are talking about. They task people with chronic fatigue syndrom to work for 20 hours a week in the fields because "their sheet says so".
The length of unemployment benefits is calculated in work years: 3 months are guaranteed, for every year worked you get 1 extra month up to 10, then 0.5 per year (changed in 2016 because the right has been in power for over 15 years).
Not that bad and you might learn some Polish or Romanian while doing those jobs as you will likely be the only Dutch person there.
And with the current job market, someone with ASML on their resume probably isn't on the bench for more than six months.
I think that heavily depends. If they're just a laid off manager without a strong network or industry connections at other major semi companies, then they might be shit out of luck since in the current economy, there's little to no demand for companies to hire more management.
On the contrary, many companies now are laying of their own managers too and not hiring new ones. If they need management tasks they tend to give them to existing IC staff instead of hiring dedicated managers from outside, which IMHO might be a good thing.
How is one exposed to tens of millions of lines of unmaintainable code during an interview?
This kind of stuff during interviews is a lot of learning in itself especially if you’re working already in the same area.
You ... ask? I've gotten answers like this just by asking in the interview.
Like just as an example, they made sure that by every coffee machine there was a whiteboard for general use. The idea was that if you ran into someone at the coffee machine and got talking and suddenly got an idea together, you could immediately jot it down and geek out about it together and work it out in more detail, right there and then. No meeting to plan, no project manager to involve, just work out your idea together. That's not what you'd expect in a company with lots of managers protecting their little islands.
ASML, NXP, and TSMC was largely boosted by Philips.
My Dad was in the finance department of Mullards-> Philips Electronics for 30 years, seemed like part of the family.
But Philips does seem to have given rise to many companies.
Even the OG division: lighting, has been spun off.
True, but here's the real kicker: when you add almost 15 years of ZIRP hyper growth since when you applied, you'll then see the same pattern in most big tech companies: overhiring, empire building and management bloat with no proportional increase in innovation or productivity, just hiring to signal to investors that you're growing and make stonks go up.
And 15 years is a long enough time for that extra weight to accumulate towards the top, since some FAANGs doubled their headcount during Covid alone. Just let that sink in.
So yeah, I'm sure your assessment from 15 years ago is fully accurate, however a lot has changed in tech the last 15 years for better and for worse, and now many of those companies in tech are doing a great reset also for better and worse.
(I am not saying OP is talking like that about them, but I am seeing some responses that do...)
So again, please let's try to be more empathic, we are not talking about terrorist or really bad guys. These are employees of companies, with familires, who probably need those salaries to live in these weird times.
I wonder how many mangers they have.
They probably shouldn't have more than 4k. It's kind of shocking they have almost 2k they can fire.
Irrespective of the difference between organizations they hired after Meta hired and they fired in the same way as Meta after Meta fired. The children did not know that they were following the piper. The piper knew.
Everyone thinks themselves unique and historic. e.g. Balenciaga will say their new logo is inspired by Modernism and so on, but really Apple made what is considered modern mass-market premium and this so-called pioneering fashion brand is just an Apple brand copycat as far as their logo.
Everything is downstream of American culture. It's why people the world over kneel before football games. Sadly, this is even true of American culture.
META is a net negative for the world. Its leadership prioritizes profit over user safety (e.g. not protecting children), it allowed democracies to be undermined by boosting misinformation and social division.
Once you do, you will see how much societal damage Meta has caused under Zuck's leadership.
Most managers are no longer technical, and just create bloated middle layers that slow everyone else down.
The only managers that are decent are the ones that have kept their technical skills sharp. Most others just seem to be able to say “my team will follow-up” and “my team will look into this” and are beyond useless. Few are shedding a tear at cleaning that up.
> The only managers that are decent are the ones that have kept their technical skills sharp.
Alex Ferguson was a terrible footballer when he was managing Manchester United. Yet they won the premiership in 6 of his last 10 years in that role, and have never won it since he left.
The skills that make one great at doing work on ones own aren't necessarily the skills that make a _team_ of 3, 6, 12 people all collaborate with one another, and with the other teams within the company.
Good management is rare, due to the tendency to promote engineers into the role instead of hiring people specifically trained in that discipline, but when you're in a well-managed -- and hence highly focused -- team the results you can all obtain together can be impressive.
This instinct can be developed due to direct experience as an engineer, but it can also be due to experience as a product manager or something else, as long as they have some curiosity to actually learn the big picture stuff.
Now with AI chatbots there's little excuse for a manager to be completely clueless about this stuff, but still there are a class of these people who just can't be bothered to care about anything other than moving units of work around boards.
Good management is rare.
This leads to a reluctance to promote people without previous experience into management roles. This in turn leads to a shortage of experienced managers.
The upside of people from within is that they know what the bottom line comes from, there's been some highlighting of the effects in terms of the founder-mode discussions.
Oh boy. This fills me with dread. I've never seen a company that starts doing buybacks not become a financialized hollow shell within a decade. Being an irreplaceable monopoly on the commanding heights of the digital economy makes this even worse.
ASML is a fairly old company (40+ years), and they have been doing share buybacks since 2006: https://www.asml.com/en/investors/why-invest-in-asml/share-b...
These are things that don't show in a spreadsheet unless you're explicitly incentivized to look at them. But that's never the case because the number of KPIs is always finite while there are infinitely many aspects that could potentially be subverted.
Then over the span of a few decades, what’s left is a shallow organization without real innovation.
Intel and Boeing are good examples of this.
Then again, this has been going on for decades. Businesses used to be about being the best for your customers and personnel. But it's all become about sticking it to everyone for the benefit of the shareholders.
I've never seen a company that ...
Example: Alphabet has started share buybacks in 2015 and increased those every year. $70B in 2025 alone. And they are firing on all cylinders product-wise.
And on the side they built the best AI and the best autonomous ride service.
Not bad for a "hollow shell" of a company.
Sure Android might be worse from a pure Linux perspective, but what shareholder has ever cared about that.
They lost battle for office software, they can't even exist in chat space, despise trying to make chat that sticks for 2 decades now, they squandered on video chat space and office space too.
IF Alphabet was actually efficient they should own office space, but 365 ate their office productivity and even the utter turd that is MS teams is beating them out on chat.
Even their search gets worse and only places where they actually have progress is AI.
They definitely have embarrassing failures (chat especially), and some are not as successful as you'd expect them to be (Gsuite, GCP). But overall I'd say they are doing pretty damn well.
Compare to Amazon for example. They've only ever had two really successful products: shopping and AWS. Alexa could have been too if they hadn't spent a gazillion dollars trying to monetise it.
Or Facebook. They've only ever had one successful product - the rest they bought after they were already successes.
> Search, Android, Chrome, Chromebooks, Maps, Gmail, Youtube, Gemini.
There is a single thing there that's not at least 10+ years old. And Search if anything is getting worse
AWS is not "a product", it's a suite of hundreds of different ones. You're also forgetting Kindles which are fairly popular.
Dividends are totally fine (from my perspective), while. buybacks are problematic from a place where executives are bonused on share price and earnings per share, both of which can be manipulated by buybacks.
More philosophically, I think that dividends are better for society as they allow investors to realise a stream of value from well run companies rather than needing to sell their share to acquire this value.
This is obviously just my opinion though, I don't know if it matches to what the OP cares about.
FWIW, companies are now opting for buybacks because it is more "tax efficient".
Stockholders have to pay taxes on dividends (immediately) but only pay capital gains on share price increases and only when they sell.
Buybacks for manipulating share prices and earnings per share are indeed silly. But they should also be trivial to compensate for by normalising on market cap instead of a single share.
The only good reason to pay out dividends instead of announcing buybacks is a view that your shares are overpriced. Then you can't buy them back without facing a potential lawsuit (you are making a company buy something you know is overvalued).
All ASML is doing is raising the share price. The investors that don't want a better deal somewhere else don't have to do a thing - they just have to not sell their shares. ASML is not deciding anything or signaling anything about future returns.
The market is the one sending the signal that there are better deals elsewhere. You can go from $5B to $500B. You can't go from $500B to $50T. There is no amount of R&D that will do that. If you picked a $5-6 billion company in 2008, and it was ASML, congratulations you now have >100x returns.
The inflection point isn't a point where buybacks increase, it's the slow/fast ride up to $500 billion.
The investors chasing 100x returns have already left. Whether the company buys its own shares or sits on its own cash, the net equity value is the same. The only signal it gives to investors is that they have more cash than they want to spend.
With different consequences and historical outcomes to more commonly used mechanisms.
> Do you invest in companies that don't distribute profits
Does every company that distributes profits do so with buybacks?
> does this get you some kind of higher return?
Do all companies payout the same ratio of market cap as dividend?
I think there's zero point to having a monopoly if you don't distribute the profits.
If you have some argument that dividends are better than buybacks I don't care.
1. From the perspective of shareholders, and for the moment ignoring taxes, buybacks and dividends are exactly economically equivalent. If a dividend happens, you get some cash. If a buyback happens, the value of your shares goes up. Crucially, the amount by which each share's price goes up is equal to what the per-share dividend would have been. It's a useful exercise to work this out and convince yourself that it's true.
2. Now let's stop ignoring taxes. If a dividend happens, you get taxed that year. If the value of your shares goes up, you don't get taxed that year. Instead, you get taxed whenever you sell, which might be later when you retire and are in a lower tax bracket, or after a period of some years when you get a lower capital gains tax rate.
3. Now let's think about the effect of dividends vs buybacks on the allocation of your portfolio as a shareholder. Neither changes the total value of your portfolio -- that was point number 1, plus just plain old conservation of dollars, modulo taxes -- but a dividend increases the proportion of your investment that's in cash, while a buyback keeps it constant. Let's say you auto-invest all dividends in the S&P 500 or equivalent index fund. Then dividends reduce your ownership stake in the company, while buybacks keep it constant.
For these reasons, most investors prefer (or ought to prefer) buybacks: they have the same economic effect as dividends but allow you to defer taxes to whenever is optimal for you. Also, and this is a smaller point, if a company does a dividend then you have to actively do something (that is, buy stock) in order to maintain the same proportion of your portfolio in that company. In other words, if you want 10% of your savings to be in X, and they do a dividend, then you have to take the cash and buy shares of X. The reason this is a smaller point is that at least in theory you can get your brokerage to do this for you automatically.
There are some nuances where point number 1 fails to hold: signaling, bad execution of the buybacks, and principal-agent conflicts. The big example of that final point is executive compensation tied to specific share prices. I'm not an expert in this area so I don't know, off the top of my head, if there's real evidence either way that this effect is very large, but it's one that people will bring up so everyone who thinks about this ought to know about it.
This is actually not true in the Netherlands, which taxes unrealized gains on wealth. Quite unique. But NL also features a dividend tax, which politicians tried to get rid off but didn't succeed because it was such an unpopular plan.
If a buyback happens, the market capitalisation drops by the amount of the buyback, and the number of shares drops by the same ratio, keeping the share price initially constant. The money goes to the investors who sell.
Buybacks are nevertheless good for investors who hold. They now have shares in a company whose market cap is 100% growing enterprise, instead of 90% enterprise and 10% bag of money. That means that if the company keeps doing well, the share price will increase faster than it would have done otherwise (it will also drop faster - it's no longer anchored to an inert pile of cash).
The investors who sell are wealthier by amount $X because now they have fewer shares and more dollars.
The investors who don't sell are wealthier by the same amount $X because the shares they kept are worth more, because prices go up.
> keeping the share price initially constant. This statement is definitely incorrect, unless you're being very technicaly and pedantic about "initially". You can think about it theoretically or you can look at empirical evidence. It is well-supported empirically that share prices go up after buybacks, and in fact they do so quantitatively by exactly the amount necessary for the equation implied above to hold.
Wouldn't the inverse of this be true in buybacks though? If it's economically equivalent then buyback should increase the price and similarly increase the proportion of X in your portfolio - which would force you to rebalance (might have tax implications).
Generally agree with the main point.
So I don't think it's going to be executed at the absolute peak. But it does imply that the finance people in ASML believe that the stock is undervalued even if the market as a whole is at all time highs.
ASML's bet paid off and for now at least their business is very sustainable.
And ASML has been paying out a dividend for a long time.
No, they are equals. Just different people doing different kinds of jobs. There should be two tracks and people should be able to choose. If engineers feel they have to become managers to grow their careers, all you are getting will just be unhappy engineers and bad managers.
There are companies that promise this, but it is rarely done. For whatever reason, management is universally convinced that ICs have lower value and are more replacable than managers.
It's also a distinctly European trait that European executives can look at US tech companies, who have IC roles on all levels, see that they are the most successful and innovative companies in the world, and conclude that yes, maybe capping IC benefits and adding another level of management is the way to go!
The issue is, even with two tracks, there's every chance that more people end up taking the management path because it's seen as an easy way to climb the ranks. Your success can be built from your teams success, rather than your own individual contribution.
Well, yes. That's what good managers are: a force multiplier.
A bunch of rockstar devs reporting to a poor manager may never move the needle in an organisation. A bunch of below average devs reporting to a stellar manager will definitely move the needle.
People want this to be true but it just isn’t in reality and can’t be. Companies are pyramid shaped and the higher up you go the more managing you do and correspondingly less engineering.
It’s baked into the structure that seniority and power is biased towards managers
Many senior ICs at tech companies DO have teams assigned to them for technical tasks, but they don't have to deal with giving feedback, managing compensation, giving bonuses, hiring, etc etc. Basically they get assigned extra hands and arms to do their tasks but aren't responsible for their growth or happiness.
Except the manager is the decider, and controls the fate of the IC. That makes them unequal, even if IC salaries were higher.
"There are no important people at ASML. Only roles with more responsibilities."
The salary is not equal.
The difference is there will probably be a lot more M7+ than IC7+ so getting to the higher ranks is easier as a manager
Dutch government stepped in last year to help facilitate a anticipated growth by fast tracking infrastructure and housing investments, as ASML is building a new campus for 20.000 employees. Then do they expect the 1700 to wait and come back in 2-3 years when the new campus is planned to be operational?
In my ~40mln country the construction sector (that includes renovation, landscaping etc.) outnumbers the IT sector 3:1.
Lead times for having things done around here are ridiculous, which is why I believe the former can absorb half of the latter with little change in salaries.
No, you do not get to charge 500 USD to change an anode rod on a water heater if I have the damn rod. That's a 20 min job MAX and the only reason I'm calling you is that putting on the stupid plumbing tape at the end is annoying for me
I understand guild warfare and the hatred of labor unions the moment that I have to deal yet another actually-should-be-in-jail levels of scamming from yet another dentist.
Y'all think that AI researchers should go to jail for hallucinated citations? Dental surgeons should go to jail for selling homeopathic remedies (ask me how I know!)
“ ASML plans to eliminate approximately 3,000 of its 4,500 management positions in engineering. The expectation is that approximately 1,400 people will be able to move into new engineering roles.”
https://www.dutchnews.nl/2026/01/after-record-year-asml-is-t...
See also the statement from ASML (linked to in that article):
https://www.asml.com/en/news/press-releases/2026/strengtheni...
https://www.bloomberg.com/news/articles/2026-01-28/asml-plan...
ASML wil zo’n 3000 van de 4500 banen van managers in de engineeringtak laten vervallen. De verwachting is dat ongeveer 1400 mensen een nieuwe functie als engineer kunnen gaan vervullen. „Van ongeveer 1700 mensen verwachten we afscheid te moeten nemen”, stelt financieel topman Roger Dassen in een toelichting.
They say it is to focus on innovation, but if you are a smart young person in NL, would you want to work where they just fired 1700 people? And if you already work there and are a top player it is a good time to rethink? A company I know wanted to focus, instead of firing, they sold the parts of the company they felt did not fit their future vision for money.
Of course, it's hard to tell how much is PR and how much reality. However, if there is substance to it, it would want me to work there even more, since they value engineering culture over management culture. Having more velocity is good.
Interesting. In old companies the only way to climb the ladder (get a raise) was to get into management. And then if they were a bad manager, they might get 'sidemoted' into some position where they could still contribute. Anyway, back in the old days, it was not uncommon to see 'managers' or even 'directors' with no direct reports.
That would be disappointing for engineers that were actually doing engineering, as yet again their grade increases would be taken by management types.
> Engineers in particular have expressed their desire to focus their time on engineering, without being hampered by slow process flows
I'm guessing ASML had a lot of regrettable attrition and heard this in the exit interviews.
Firing 1700 managers is somewhat different than firing 1700 ICs. Whether managers will want to work there is an open question, but quite a lot of ICs will see the trimmed management layer as a good sign that they'll be free to get shit done
> Individual contributor, a business role for an employee without management responsibilities
They've also done another thing:
>ASML also announced a new share buyback programme of up to €12 billion, to be executed by 31 December 2028.
They have €12 billion they don't know what to do with with so they will give it to shareholders, for a nice gain of less than 1% per year for the next 3 years. Assuming the annual salary costs of each of the 1700 employees is 150K (likely much much lower) those 12 billion could have paid for their employment for the next 47 years.
My impression was that people were constantly being promoted into management and at some point we just had too many managers and that's why it was done. Of course, when you know this, the question becomes: why allow things to get to this point in the first place?
I actually am curious why this isn't a more commonplace practice. Why would we build systems that keep accumulating managers at the expense of skilled senior engineers?
Layoff --> increase short term valuation --> increase value per share --> owner of shares happy during buyback.
After, it's true that having a lot of middle management can slow things down. On the other side, they could have indeed created new entities, new projects, re-qualify employees,...
I wonder what correlation will exist between the set of people who end up leaving the company, and the set of people responsible for setting up those "slow process flows" in the first place.
[1] https://www.asml.com/en/news/press-releases/2026/strengtheni...
How many are left when you are done? Same number, just in different branches.
The advent of AI should be making deeper cuts in management areas than in engineering.
I don't want to trash anyone. Having said that, I always kept my engineering approach as opposed to being a manager in the sense that what I did became an end in itself.
I was more of a renegade within corporate, and used this unique position to achieve fun and results way above everyone else. I got proof, this ain't no bragging. It was easy mode, I used the top notch devs I could hire and automated everything, build a platform, that became internally the de facto standard, which caused 600+ Mio EUR cost savings within 4 years and counting with a headcount of 8.
Long story short: I was a bit Googly, knowing them a bit and having been there.
Here is the gist: To this day I could never grasp what my manager collegues or their peers and directs were doing. I asked many and many times of any rank, because I wanted to learn.
Most things were related to administrativ stuff like vacations permissions, performance reviews, budget "planing" - and of course meetings, meetings, meetings.
95% of what the HIPPOS with high 6figure and 7figure incomes in the room were doing could easily been done by an intern, except for the people affais.
Only requirement is discipline to sometimes just sit still in a chair and jumping via Zoom from meeting to meeting every 30 minutes from 8:00/9:00 to 19:00. Monday to Thursday.
All you have to do is rely on these phrases: "What are the next steps?", "I will delegate this to...", "Now start the reports please."
These people were IT managers - of course no one except me had any (!) Computer Science background.
Google taught me, that it is totally easy to train a computer scientist business skills, but impossible to train any non-IT person Computer Science. This holds true.
So yes, I can totally relate to these news here, however I feel sorry for the people anyway. Good faith in most cases has to be used. That they do everything to appear irreplaceable and therefore cause havoc along their "career" is only the flipside of human behavior and dysfunctional settings.
Take care of your craft and be proud, if you are in need.
You could say it is restructuring, eliminate positions or laid off but firing to me means something very different.
And yes, wondering how many of these employees will be hired by Chinese counterparts.
The US is pretty dynamic. So is every country. To the extent it appears not to be there is usually some entity with it's thumb on the scale.
But even the knowledge on its own is enough - after all, a lot of that is in published scientific papers already. ASML works because they combined everything. China can't just build a copy of their EUV machines without also having a copy of their suppliers.
I'm pretty sure those aren't even a consideration if you relocate to a different economic superpower.
And besides, while in the Netherlands people do sign no-compete clauses, in practice they're not enforceable by law. Or so I've heard.
> The cuts will mostly impact employees at leadership level in the Netherlands and will also affect operations in the US. The planned reductions represent about 4% of the company’s workforce.
[1] Source: https://www.ed.nl/binnenland/vakbonden-woedend-na-keiharde-i...
I’ve had some amazing managers that were engaged and did more than go to and from meetings. And I’ve had some that improved things vastly just by leaving the room.
If you don't reach your targets it's not the engineers fault.
It's bad management ;)
ASML understands what most big companies don’t: if you hit all your targets you weren’t setting yourself tough enough targets.
There we go.
You don't really need an army of sales managers to sell such a product. Going lean on management and more heavy on engineering is therefore a good idea if you want to keep the lead you have.
For non-technical supply chain managers to pick up enough technical chops to understand the stuff they are supposed to manage the supply chain of is comparatively more difficult.
Especially when fierce negotiations to push the price down are not the highest priority, but robustness of supply chains, having alternative options that technically work, and ensuring quality according to tight specs are paramount. Which is how I assume ASML supply chain management to work.
This reminds me of a company I worked for recently, that, at the yearly meeting talking about the financial situation were all depressed as if we were broke since the profit (and revenue) was slightly less than last year, which was significantly higher than any other year in history with the year prior also being a record. This was essentially when the interest rates jumped after covid and businesses had to adapt so I'm sure it would have been another record if the economy in general wasn't doing worse that year.
Of course, they want to keep people from asking for raises and bonuses, but I found it very weird to see them act worried with the profit/revenue graphs at a crazy peak still.