| LONDON STMicroelectronics NV presented plans to cut 2,300 European jobs by mid-2006 to its European Work Council, on Wednesday (June 8), the company said. This means that Europe is set to bear the largest part of a planned cut of 3,000 jobs outside Asia that ST announced May 16. |
The company did not indicate exactly where the remaining 700 jobs would be cut, although the U.S is ST's other major geographic area of operation.
ST announced the intention to cut its workforce outside Asia after posting poor results for the first quarter of 2005. It said these were partly related to weakness of the dollar. ST has slipped down the top-ten rankings for the first quarter according to market research company iSuppli.
The company said it plans to reorganize its European activities by optimizing its wafer test activities on a global scale, by reducing support functions, by rationalizing activities outside manufacturing, and by disengaging from certain activities. ST said the plan would be submitted to works councils in each of the countries involved.
European labor laws give works councils a major consultative role with regard job cuts.
There has been speculation that ST could combine its memory operations with those of flash memory maker Spansion LLC, which if done in the form of a three-way joint venture between Advanced Micro Devices Inc., Fujitsu Ltd. and ST, could remove a number of jobs from ST's payroll and meet its disengagement plans.
In its latest announcement ST said it was committed to minimizing the social impact of its reorganization and would favor voluntary redundancy, early retirement, transitions to part-time working and taking time to implement job reduction. ST said it was committed to remain an "integrated technological and industrial company".