Chipmaker STMicroelectronics may cut 2,000 to 3,000 jobs in France and Italy
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STMicroelectronics supplies companies like Apple and Tesla with "legacy chips", which use older technology.
PHOTO: REUTERS
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Milan - STMicroelectronics is considering reducing its workforce by as much as about 6 per cent through early retirements and attrition, according to people familiar with the matter, as the Franco-Italian chipmaker confronts a prolonged demand slump in the industrial and auto sectors.
The job cuts under discussion, which could be announced as soon as this month, are in the range of 2,000 to 3,000 workers and will affect its operations in both Italy and France, according to the people. The decision is not final and the scale of the reductions is still under review, they added.
STMicro was formed in a merger of France and Italy’s state-owned chipmakers in 1987 and is considered a strategic enterprise by both countries. It supplies companies such as Apple and Tesla with so-called legacy chips, which generally use older technology and do not require state-of-the-art production facilities. It has more than 50,000 employees.
The Italian government, which together with France holds a 27.5 per cent stake in the company, is seeking to limit the impact of the restructuring on the Italian workforce, the people said.
“In the coming weeks, we will start engaging in a constructive dialogue with employee representatives around end-of-career support programmes, built on a voluntary basis, including early retirement,” a spokesperson for STMicro said, declining to comment further. Representatives for the French Finance Ministry and Italian Industry Ministry declined to comment.
STMicro is looking for ways to shrink its cost base and is planning an early retirement programme for some workers, chief executive Jean-Marc Chery said on an earnings call with journalists on Jan 30, adding that the company would start engaging with employee representatives about a plan based on voluntary departures. A slump in the industry has forced the Geneva-based company to repeatedly scale down its financial ambitions in recent periods, and its share price has fallen more than 45 per cent in the last 12 months.
STMicro on Jan 30 called 2024 one of the worst years in decades for the industry and forecast first-quarter revenue that missed analysts’ expectations. The company did not provide a full-year outlook, breaking with tradition. Competitor Texas Instruments also gave a disappointing estimate last week for the current period, citing sluggish demand and higher manufacturing costs. BLOOMBERG
