Semiconductor maker STMicroelectronics has announced much greater cuts than previously announced. Before it said it was planning to reduce its workforce by around 1,200. Now it is talking about a total of around 3,000.
That will be done through layoffs and outsourcing work between now and the middle of next year. The cost is expected to be between 80 and 100 million euros, but would bring savings of around 70 million euros a year.
STMicroelectronics is one of Europe’s biggest chipmakers, and the fifth largest in the world, but the company has struggled recently with intense pricing competition. In a statement it said the move was neccessary because of “the slowing growth rate of demand and by the continued weakness of the dollar, which especially impacts European-based companies.” The cuts are part of a restructuring plan aimed at returning the company to profitability following what it described as ‘disappointing’ results in the first-quarter.
Shares in the French-Italian group, which are traded in New York, Paris and Milan, showed little change after the announcement. One London based analyst said: “Going by the share price, the news hasn’t been that well received by the market, probably because the restructuring – from the details known – did not appear to go far enough.”