STMicroelectronics, an expert in microchips, anticipates a thousand intentional exits from France by the year 2027.
Layoff Alert: STMicroelectronics prepares to bid adieu to around 1,000 employees in France by the end of '27
In an exclusive reveal to Agence France-Presse (AFP) on April 30, top electronic component group, STMicroelectronics, announced its plan for the voluntary departure of approximately 1,000 employees in France, marking the end of an era by 2027. This move forms part of a project unveiled in October 2024, which could potentially lead to up to 2,800 voluntary exits among the group's 50,000+ employees worldwide. The company assures there won't be any forced layoffs or closures of any sites as part of this plan.
The tech giant faced some challenge in its Q1 results last week, but hopes for a turnaround in the second quarter, despite ongoing geopolitical uncertainties. The sector of semiconductors has been battling the trade war instigated by US President Donald Trump, leading to increased tariffs on imports to the United States.
Brewing Tensions Among Shares Owners
STMicroelectronics is feeling the heat in more ways than one. Tensions between its co-shareholders, France and Italy, are on the rise. These two nations jointly own 27.5% of the shares but clash over the company's governance and the leadership of CEO, Jean-Marc Chery.
Italy's Finance Minister, Giancarlo Giorgetti, pulled his support for Jean-Marc Chery in early April. This action was triggered by the board's reluctance to support one of Rome's proposed candidates for integration into this internal group. On the contrary, the board remained steadfast in their support for the CEO.
Check out | Why Europe's Chip Production Lags Behind: An Exclusive Insight on our site with AFP
SubscribeContribute
Reuse this content
Behind the Scenes:
The job cuts in France (a part of a global reduction of 2,800)[3][4] are slated to streamline operations, shift production focus (like moving away from Tours facilities), and prioritize advanced 300mm/200mm silicon carbide fabs[4][5]. These measures aim to generate high triple-digit million-dollar annual savings by 2027 through increased automation and efficiency[4].
The escalating dispute between France and Italy pertains to Italy's criticism of management decisions, with their Economy Minister accusing the CEO, Jean-Marc Chery, of insider trading by selling shares before weak earnings[2]. The board has refuted these allegations[2]. Moreover, Italy's nomination of Marcello Sala for ST's supervisory board metwith internal resistance, reflecting disagreements over strategic oversight[2]. Both nations aim to protect their manufacturing interests, while ST balances its commitment to "strategic assets in Europe"[5].
- Despite the ongoing geopolitical uncertainties, STMicroelectronics is optimistic about a turnaround in its second-quarter business, even after facing challenges in its Q1 results.
- In an effort to streamline operations and prioritize advanced technology, STMicroelectronics plans to reduce its workforce by 1,000 employees in France, as part of a global reduction of 2,800 employees, by 2027.
- Tensions between STMicroelectronics' co-shareholders, France and Italy, have escalated, with Italy's Finance Minister, Giancarlo Giorgetti, pulling his support for CEO, Jean-Marc Chery, over disagreements on governance and strategic oversight.
- The job cuts in France are intended to generate high triple-digit million-dollar annual savings by 2027 through increased automation and efficiency, and to shift the production focus, potentially moving away from Tours facilities, and prioritize advanced 300mm/200mm silicon carbide fabs.
