STMicroelectronics Inc. (ST, Geneva, Switzerland) reported that it would make an additional 3,000 job cuts in its efforts to return to profitability following its first quarter financial results. The cuts are meant to "reposition the company’s cost structure in the competitive environment of the industry, characterized by the slowing growth rate of demand and by the continued weakness of the dollar, which especially impacts European-based companies," stated ST in a statement.
The company previously announced a series of initiatives aimed at improving the company’s competitiveness and financial performance through accelerated innovation, a reduction of costs, and the broadening of its customer base. In addition to the previously announced measures, ST said it would also make additional cuts to reduce its workforce outside Asia by 3,000 people to be completed by mid-2006. This number combines some already announced, ongoing actions, as well as further restructuring and streamlining. Further details are expected in the coming weeks.
As a result of the new measures, the company anticipates it will save an additional $90 million per year following completion of the plan. Restructuring charges are estimated to be between $100 million and $130 million.
