French-Italian chipmaker STMicroelectronics announced it will cut a tenth of its workforce worldwide because it forecasts a slide in the chip market.
AFP - French-Italian semiconductor maker STMicroelectronics said Wednesday it will cut 4,500 jobs, a tenth of its workforce, and predicted the global chip market will slide by at least 25 percent this year.
STMicro, ranked fifth among global chipmakers, registered a loss in 2008 of 786 million dollars (596 million euros) as sales fell 1.6 percent to 9.84 billion dollars.
The company said it aimed to achieve savings of 700 million dollars this year through 4,500 job cuts and the closure of three factories in the United States and Morocco that has already been announced.
The company said sales fell 17 percent in the final quarter of last year to 2.28 billion dollars and that with the sharp decline in demand, its factories would likely be operating at around 50 percent of their capacity in the first three months of this year.
First quarter sales were estimated at 1.50-1.85 billion dollars, down 25-40 percent from a year earlier.
STMicro chairman Carlo Bozotti said the decline in the global chip market would likely surpass the 16.3 percent fall foreseen by the Gartner industry research group in mid-December.
"I think the drop will be bigger and will be more than 25 percent," Bozotti said during a conference call.
Date created : 2009-01-28