Infineon is struggling to emerge from the crisis and wants to cut thousands of jobs or relocate them to low-wage countries. At least in Germany, this should be done without compulsory redundancies.
The struggling chip manufacturer Infineon wants to cut 1,400 jobs and relocate another 1,400 to cheaper countries. The company from Neubiberg near Munich had previously presented figures for the third quarter of its financial year that show that the group is only slowly emerging from the current crisis. Earnings and sales have increased slightly compared to the second quarter, but they are still a long way from the level of the previous year. Profits in particular have collapsed, falling by more than half to 403 million euros.
It was already known that the current program to increase competitiveness would also cost jobs. It was unclear how many jobs would be lost. Infineon CEO Jochen Hanebeck did not say where exactly they would be cut or relocated. The manager explained that they wanted to inform the employees first. He ruled out redundancies in Germany. The measures were “a difficult step” that management “did not take lightly.”
Guarantee for Regensburg location
It has been known for several months that a mid-three-digit number of jobs are to be cut in Regensburg. They are part of the total figures now announced. The cuts in the Bavarian city mainly affect one manufacturing area. Overall, Regensburg remains a central location,” stressed Hanebeck. It is being geared more towards innovation. This means it is “secured for many years to come.” Regarding the Dresden location, the Infineon boss said that jobs would continue to be created there.
According to Hanebeck, the relocation of 1,400 jobs affects all “high-wage countries” from North America to Asia. First and foremost, they went to cheaper countries in which Infineon is already active.
Infineon is currently suffering – like much of the chip industry – from weak demand for its products. After the chip shortage in recent years, the situation has turned around: while retailers and customers had ordered well in advance and built up stocks, these have recently been scaled back and chips are being ordered at shorter notice because there are no longer any problems with availability.
Markets recover only slowly
Infineon CEO Jochen Hanebeck spoke of a challenging market environment. “The recovery in our target markets is progressing slowly.” This development is also weighing on Infineon. The group has recently had to lower its forecast several times and its third-quarter sales of 3.7 billion euros were also slightly below expectations. He expects sales of 4 billion euros for the fourth quarter and a total of 15 billion euros for the current year. 2024 is a transition year, emphasized the Infineon CEO. We can now see a bottoming out of the cycle. “Most of the correction is behind us,” he said.
The news from Infineon was not received badly on the stock market. After the stock had started weakly in the morning, it turned positive in the morning and was the strongest value in the overall significantly declining DAX stock index. However, the stock had already lost a lot of value in the past two months.
Source: Stern
