STMicroelectronics Considers Cutting 6% of Workforce Amidst Slump
STMicroelectronics NV is evaluating workforce reductions of approximately 6% through early retirements and attrition, according to sources close to the matter. The Franco-Italian chip manufacturer faces a protracted decline in demand from industrial and automotive sectors.
The job cuts, expected to be announced in the coming month, could range from 2,000 to 3,000 workers and impact operations in both Italy and France. The sources, requesting anonymity due to confidentiality, emphasized that the decision is not final and the scale of the reductions remains under consideration.
The Italian government, holding a 27.5% stake in STMicro alongside France, aims to minimize the impact on its domestic workforce. STMicro acknowledges plans for an early retirement program and will engage employee representatives regarding the voluntary departure scheme.
The company's Chief Executive Officer, Jean-Marc Chery, has previously hinted at cost-cutting measures and early retirement programs. A slump in the industry has led STMicro to scale back its financial projections, resulting in a significant share price decline over the past year.
Shares of STMicro rose marginally in Paris trading on the news, attributed to a projected revenue shortfall in the first quarter that fell below analysts' expectations. The company has withheld a full-year outlook, departing from previous practice. Rival Texas Instruments has reported similar pessimistic estimations, citing sluggish demand and increased manufacturing costs.
STMicroelectronics emerged from a merger between state-owned chipmakers in France and Italy in 1987 and is deemed a strategic asset by both nations. Catering to companies like Apple and Tesla, STMicro supplies legacy chips utilizing older technologies without the need for advanced production facilities. The company employs over 50,000 individuals worldwide.