STMicroelectronics announces plans for 1,400 job cuts worldwide

PARIS (REUTERS) - Franco-Italian chipmaker STMicroelectronics on Wednesday said it would cut about 1,400 jobs worldwide as part of a global restructuring plan affecting its set-top box activity.

The headcount reduction includes about 430 positions in France, 670 in Asia and 120 in the United States, STMicro said in a statement. The chipmaker also said it would redeploy about 600 employees.

Once completed, the plan will generate annualised savings of US$170 million (S$242.9 million), STMicro said. Total restructuring costs would also be US$170 million.

"This difficult decision is consistent with our strategy to only participate in sustainable businesses and is due to the significant losses posted by our set-top box business over the past years in an increasingly challenging market," chief executive officer Carlo Bozotti said.

STMicro also announced that its fourth-quarter gross margin stood at 33.5 per cent, in line with its target. Net revenue fell to US$1.67 billion from US$1.83 billion a year earlier.

Its midpoint gross margin target for the first quarter is about 33 per cent, it said. First-quarter revenue is expected to decrease by a midpoint target of 3 per cent from the fourth quarter.