Home News Infineon to cut hundreds of jobs due to weak demand

Infineon to cut hundreds of jobs due to weak demand


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According to the International Electronics Business News on the 9th, German chipmaker Infineon Technologies has announced a cost-saving plan. As part of the cost-cutting plan, the company will also lay off hundreds of employees at its Regensburg plant.

According to foreign media reports, German chipmaker Infineon recently announced a cost-saving plan, again lowering its full-year revenue forecast and blaming it on continued weak demand across the industry. 

In response to weak demand

Infineon lowered its full-year financial forecast

The company lowered its revenue guidance for 2024 to 15.1 billion euros (about 16.3 billion U.S. dollars), plus or minus 400 million euros, lower than the previous guidance of 16 billion euros, plus or minus 500 million euros.

Infineon said that the divisional performance margin (management's preferred operating profit indicator) may also be lower than the forecast three months ago, about 20%. The company lowered its expectations in February this year, but at that time predicted a recovery in the second half of the year. However, Infineon CEO Jochen Hanebeck said on Tuesday that due to the economic situation, many end markets have been weak, and customers and distributors have continued to reduce semiconductor inventory levels, especially the automotive industry has slowed down significantly. As one of the chipmakers, Infineon is also struggling to cope with weak demand from automakers and personal electronics. To address this, Infineon is launching measures focused on production, portfolio management, prices and operating costs, which the company said will have a positive impact on adjusted or segment performance from fiscal 2025.

"Our goal is to achieve structural improvements in the segment and achieve triple-digit million euros per year," Jochen Hanebeck said in a statement.

Infineon's second-quarter revenue fell slightly from the previous quarter to 3.63 billion euros, and the division's performance shrank 15% to 707 million euros.

Confirmed that hundreds of layoffs will be made

Infineon has confirmed layoffs as part of its announced austerity plan. Hundreds of jobs will be lost at Infineon's Regensburg plant, but no further details were disclosed.

"On May 7, employees were informed that these changes will affect three-digit jobs in Regensburg," a spokesperson said. But emphasized that the restructuring is expected to be carried out without business-related terminations, and Infineon will not force layoffs, and will use floating, partial retirement and voluntary resignation to reduce the number of employees.

So far, Infineon has about 3,100 employees at the Regensburg plant. The spokesperson said that layoffs are coming, but the Regensburg plant will "continue to play an important role as an innovation center."

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