PARIS: Franco-Italian chipmaker STMicroelectronics said on Wednesday it would cut about 1,400 jobs worldwide as part of a global restructuring plan that would put an end to its set-top box business.
The headcount reduction includes about 430 positions in France, 670 in Asia, mostly in India, and 120 in the United States, STMicro said in a statement. The chipmaker also said it would redeploy about 600 employees within the company.
Once completed, the plan will generate annualized savings of $170 million, STMicro said. Total restructuring costs would also be $170 million.
STMicro's set-top box activity is part of its digital products group division, which also makes smartphone sensors and has been struggling for several years. Chief Executive Officer Carlo Bozotti said last May that the business needed "to be fixed".
The Geneva-based company had since repeatedly delayed saying whether it would restructure or sell the division.
"This difficult decision is consistent with our strategy to only participate in sustainable businesses and is due to the significant losses posted by our set-top box business over the past years in an increasingly challenging market," Bozotti said on Wednesday.
STMicro also announced that its fourth-quarter gross margin stood at 33.5 percent, in line with its target. Net revenue fell to $1.67 billion from $1.76 billion in the third quarter.
Its midpoint gross margin target for the first quarter is about 33 percent, it said. First-quarter revenue is expected to decrease by a midpoint target of 3 percent from the fourth quarter.
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