Lowering its annual forecast to 15 billion euros, semiconductor company Infineon declared a reduction and relocation of 2,800 jobs due to a third-quarter revenue deficit.
On Monday, the German chipmaker Infineon announced that it will cut 1,400 jobs and relocate another 1,400, following a revenue shortfall in the third quarter. This led the company to lower its full-year forecast for the third time in a few months.
With a global workforce of around 58,600, the company has revised its annual revenue forecast to about 15 billion euros ($16 billion), down from the previous range of 15.1 billion euros, with a variance of 400 million euros.
Infineon recorded a revenue of 3.702 billion euros for April-June, below the 3.8 billion euro forecast and down 9% year-over-year. Net profit of 403 million euros also missed the expected 447-million-euro target. The CEO, Jochen Hanebeck, noted slow market recovery and excess inventory due to weak economic conditions.
Following this revision, Infineon will eliminate 1,400 jobs globally and relocate another 1,400 to lower-cost countries under its ‘Step Up’ cost savings program, as announced by Hanebeck.
Despite an initial 6% drop, Infineon shares rose 0.8% by 0830 GMT on Monday. Analysts regarded this as better-than-expected segment results and positive fourth-quarter growth forecasts. Infineon’s segment result margin was strong at 19.8%, and relief was expressed over the lack of significant negative surprises compared to competitors.
Hanebeck stated that Infineon is performing well in the challenging market. He predicted the ‘Step Up’ program, introduced in May, will positively impact the company’s adjusted results in the 2025 fiscal year.
Revenue in the automotive sector, a weak area for the industry, increased slightly to 2.11 billion euros this quarter, according to Infineon. Stronger demand for microcontrollers in ‘software-defined vehicles’ drove this increase.
