STMicroelectronics (STM, Financial), a leading European chip manufacturer, is reportedly considering a workforce reduction of up to 6% through early retirement and natural attrition. This decision comes as the company faces persistently weak demand in the industrial and automotive sectors.
The potential layoffs, which could affect between 2,000 to 3,000 employees, are expected to be announced soon. Operations in both Italy and France are likely to be impacted. However, the final decision regarding the scale of layoffs is still under evaluation.
The Italian government, which jointly owns 27.5% of the company with France, is seeking to mitigate the restructuring's impact on Italian employees. A spokesperson from STMicroelectronics mentioned that discussions with employee representatives will commence in the coming weeks to discuss voluntary early retirement and other career transition support plans.
The company recently stated that 2024 is shaping up to be one of the industry's toughest years in decades, with first-quarter revenue projected to fall short of analysts' expectations. Notably, STMicroelectronics has refrained from providing a full-year outlook, breaking from tradition.
Founded in 1987 through the merger of French and Italian state-owned chip manufacturers, STMicroelectronics is considered a strategic enterprise by both countries. The company supplies traditional chips to major clients like Apple and Tesla and employs over 50,000 people.
