CEO Jean-Marc Chery confirms the cuts, which include 2,800 previously announced layoffs and a gradual reduction through early retirements and voluntary departures.
European semiconductor manufacturer STMicroelectronics (STM) will cut 5,000 jobs over a three-year period, CEO Jean-Marc Chery confirmed during an event organized by BNP Paribas in Paris. This move is part of a restructuring plan aimed at saving hundreds of millions of euros by 2027, in response to market pressures and a cost-containment strategy initiated at the end of 2024.
Of the 5,000 positions being eliminated, 2,800 have already been communicated previously, and another 2,000 will occur through natural exits, such as retirements or non-renewal of contracts. The remainder is expected to materialize through voluntary departures, as Chery indicated.
Resistance in Italy and State Involvement
The CEO also pointed out that negotiations with local authorities, especially in Italy, have delayed some of the plan’s implementation. In that country, the government has strongly opposed new cuts, demanding they be limited to a maximum of 1,000 layoffs.
France and Italy, which jointly hold a 27.5% stake in STMicroelectronics, are directly involved in the group’s strategic decisions, which currently employs 50,000 people worldwide.
In April, STM had already confirmed that 1,000 of the 2,800 layoffs announced in France would be voluntary, in an attempt to soften the social impact of the adjustment plan.
Between Market Pressure and Internal Controversies
The decision comes in a complex context for STM, marked by declining demand in key market segments and increasing competitive pressure in the semiconductor sector. Additionally, the company has had to deal with rumors and allegations of alleged insider trading against its CEO, which the company has strongly denied.
Despite these challenges, STM management maintains its roadmap aimed at reinforcing profitability and investment capacity, especially in emerging areas like artificial intelligence and onshore manufacturing in response to new trade policies driven by the U.S.
Restructuring with Limited Impact on Production
Although the cuts are significant in absolute numbers, internal sources indicate that no immediate impact on manufacturing operations is expected, thanks to the gradual nature of many of the exits and compensations.
The company, which produces key components for automotive, industrial electronics, and consumer products, now faces the challenge of balancing its cost-cutting strategy with operational continuity and retaining critical talent.
The announcement from STMicroelectronics underscores the difficulties facing the European semiconductor industry in a global transformation context. While other firms, such as SpaceX, Intel, or TSMC, are accelerating investment in packaging and local production capabilities, STM is choosing to cut costs amid market pressures. In the short term, this adjustment could improve margins. In the long term, the challenge will be to maintain competitiveness without compromising its human capital and capacity for innovation.
Source: finviz