Despite state aid, STMicroelectronics cuts 1,400 jobs

by bold-lichterman

Following the publication of its financial results for the fourth quarter and full year 2015, STMicroelectronics announced 1,400 job cuts worldwide. In France, 430 jobs are affected “via a voluntary departure plan”, against 670 in Asia and 120 in the United States. In 2016, 1,000 employees were affected, specifies the group. This downsizing is due to the closure of its set-top boxes and other domestic products activities.

These deletions concern several digital activities of the Franco-Italian group. “Today we are announcing the end of the development of new platforms and standard products for set-top-boxes and domestic gateways. This difficult decision is in line with our strategy of operating only financially sustainable activities, and is the consequence of the significant losses of the set-top-box products activity over the past few years in a market environment of increasingly difficult, ”announced Carlo Bozotti, President and CEO of STMicroelectronics.

Public funding to support the activity

A decision that confirms the fears of employees expressed last September, about the governance of the group that they considered disastrous. In a letter, employees denounced inconsistencies in the management of the Franco-Italian group, while the latter had received 34 million euros in European subsidies to develop its nanotechnology activity. Called “Tours 2015”, the project was to develop “the design and production of components improving the energy efficiency of electrical devices, of new generation passive components”.

On the other hand, the French State has contributed 400 million euros in grants under the program “R&D Nano 2017», Carried out on the Crolles site. With Grenoble, this site is directly affected by the deletion plan.

At the end of this plan, the company estimates the savings at 170 million dollars on an annualized basis, and estimates the cost of restructuring at the same level. At the same time, STMicroelectronics, of which the State is a 13.5% shareholder, posted net sales of $ 1.67 billion in the fourth quarter of 2015, for a gross margin of 33.5%. Over the year 2015, its net income was down 20% to $ 104 million.

STMicroelectronics employs a total of 43,600 people worldwide, including 11,000 in France and 10,000 in Italy. The group has already lost 8,560 jobs between 2007 and 2011, denounced the unions.

Read also: STMicroelectronics unions denounce catastrophic management of digital activity

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