Shares of Microchip Technology fell more than 3% after the chipmaker announced plans to raise capital by offering $1.35 billion in convertible stock.

The shares, which had closed up 0.7% at $54.57, dropped 3.2% to $52.79 in after-hours trading. Microchip has a market value of about $29 billion with 537.82 million shares outstanding.

The company stated that it plans to use the net proceeds from the offering to cover the costs of capped call transactions, which help limit share dilution, and to repay existing debt, including outstanding notes from its commercial paper program.

Earlier this month, Microchip announced it would cut approximately 2,000 jobs, or about 9% of its workforce, in response to excess inventory and slowing demand from car manufacturers.

The Chandler, Arizona-based company indicated that the job cuts will primarily affect its factories in Gresham, Oregon, and Colorado Springs, Colorado, leading to an estimated $100 million reduction in its annual operating expenses.