- Infineon plans to cut 1,400 jobs and relocate jobs
Stumbling chipmaker Infineon to cut 1400 jobs and relocate another 1400 to cheaper countries. The company from Neubiberg near Munich had previously reported figures for the third quarter of its fiscal year that showed the company was only slowly recovering from the current crisis. While revenue and earnings had increased slightly compared to the second quarter, they were still far from the level of the previous year. Notably, profits had plummeted by more than half to 403 million euros.
That the current program to enhance competitiveness would also cost jobs was already known. However, it was unclear how many jobs would be affected. Infineon CEO Jochen Hanebeck did not specify where the jobs would be cut or relocated. The company plans to inform employees first, the manager explained. He ruled out mass layoffs in Germany. The measures were "a difficult step" that the management "had not taken 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, which are part of the total now announced. The cuts in the Bavarian city mainly affect a production area. Nevertheless, Regensburg will remain a central location, Hanebeck emphasized. It will be further focused on innovation, ensuring its security for many years. Regarding the location in Dresden, the Infineon CEO said that jobs would continue to be built up there.
The relocation of 1400 jobs affects all "high-wage countries" from North America to Asia, according to Hanebeck. They will primarily go to cheaper countries where Infineon is already active.
Infineon is currently - like many other chipmakers - suffering from weak demand for its products. After the chip shortage in recent years, the situation has reversed: While businesses and customers had previously ordered well in advance and built up inventories, these are now being reduced and chips ordered on a short-term basis because there are no longer any availability issues.
Markets recovering slowly
Infineon CEO Jochen Hanebeck spoke of a challenging market environment. "The recovery in our target markets is proceeding only slowly." This development is also affecting Infineon. The company has had to lower its forecast several times and in the third quarter, it fell short of expectations with revenue of 3.7 billion euros. For the fourth quarter, it expects revenue of 4 billion euros, and for the current year, a total of 15 billion euros. 2024 will be a transition year, the Infineon CEO emphasized. The company now sees a bottoming out in the cycle. "The largest part of the correction is behind us," he said.
At the stock exchange, the news from Infineon was well received. After the share had initially started weakly in the morning, the stock turned positive in the morning and was the strongest value in the overall significantly declining DAX index. However, the share had already lost significant value in the previous two months.
Infineon, amidst its efforts to enhance competitiveness and recover from the economic crisis, plans to manufacture electrical equipment in countries with lower costs. The relocation of 1400 jobs from high-wage countries to cheaper locations will primarily benefit Infineon's operations in regions where it currently has a presence.
