Chip manufacturer Infineon is cutting 1,400 jobs and relocating the same number of workplaces to countries where labour is cheaper. Infineon is a German company and one of Europe’s top three chip makers for the global automotive chip industry.
Infineon is cutting its workforce to save costs. The cuts are necessary due to declining sales and profits. The company presented the quarterly figures on Monday. Sales fell nine percent (3.7 billion euros) compared to a year earlier, and profits were lower than forecast (403 million euros). Investors expected a profit of 447 million euros.
‘Infineon continues to hold up well’
The automotive industry is causing headaches for just about every chipmaker due to a slow down in sales. According to CEO Jochen Hanebeck, the impact of this contraction has only been felt to a limited extent on the company’s results. “In a market environment that remains challenging, Infineon continues to hold up well,” he said.
Still, “hundreds” of jobs will have to be cut at the German plant in Regensburg. This is part of the cost-cutting plan to prevent further job losses in Germany. “We are ruling out forced layoffs in Germany,” Hanebeck told Reuters.
Job losses at BelGaN
At Belgian competitor BelGaN, the situation looks less salubrious. The chip factory recently filed for bankruptcy, putting 440 people at risk of losing their jobs. Only by finding a buyer is a restart possible.
Tip! Read our blog to know why the auto chip industry is currently in dire straits: Will the automotive chip sector die if electric cars are not the future?
