It is Europe again. Amid market challenges, now STMicroelectronics is considering cutting up to 6% layoff in France and Italy, as part of a restructuring and cost-saving plan.
STMicroelectronics, the French-Italian semiconductor company, is reportedly restructuring their business, potentially resulting in the loss of up to 3000 jobs, or 6% of its workforce, at its plants in France and Italy. This move is part of a broader cost-cutting initiative, according to sources cited by Bloomberg.
Although a company spokesperson did not confirm the exact number of layoffs, they referred to comments made by CEO Jean-Marc Chery during the company’s fourth-quarter earnings report, where he indicated that discussions would be held with unions regarding voluntary reductions in workforce numbers as part of a $300 million savings plan.
As per the report, Pietro Occhiuto, the leader of the FIOM CGIL union in Brianza, where one of ST’s plants is located, revealed that an early retirement plan had been proposed to the European Works Council. Under this scheme, only one position would be rehired for every three workers who take early retirement.
Rosy Scollo, head of the Fiom Cgil union in Catania, expressed concerns over job security and called Italian Industry Minister Adolfo Urso to intervene, seeking assurances that current employment levels would be maintained and investments in new hiring would continue. However, government representatives of France and Italy have refrained from making a statement.
Earlier this year, the Italian government granted STM a €2 billion subsidy to build a microchip plant, which is expected to create 3000 new jobs. Despite this, STMicroelectronics, in which the French and Italian governments hold a 27.5% stake, has been facing challenges due to a downturn in its key markets of automotive and industrial sectors.
The company had previously announced plans in November to reduce production at older plants and focus on more advanced facilities in Crolles, France and Agrate, Italy.
STMicroelectronics was created in 1987 through the merger of France and Italy’s state-run semiconductor companies and is regarded as a key enterprise by both nations. It provides legacy chips, which use older technology and do not require advanced production facilities, to major companies like Apple Inc. and Tesla Inc. The company employs over 50,000 people worldwide.
