BERLIN (Reuters) -Infineon will implement 1,400 job cuts and relocate an additional 1,400 employees. This decision follows Infineon job cuts after the third-quarter revenue missed expectations. Consequently, the German chipmaker downgraded its full-year forecast for the third time in a few months. #InfineonJobCuts
The firm, which has around 58,600 staff worldwide according to its website, narrowed its annual revenue guidance to around 15 billion euros ($16 billion), having already twice lowered it, most recently to 15.1 billion euros, plus or minus 400 million.
Revenue for the April-June quarter came in at 3.702 billion euros, short of the 3.8 billion forecast in a company-provided consensus and down 9% on the year. Net profit was 403 million euros, also missing the consensus forecast of 447 million.
“The recovery in our target markets is progressing only slowly. Prolonged weak economic momentum has resulted in inventory levels in many areas overlaying end demand,” said Chief Executive Jochen Hanebeck.
As part of the previously announced “Step Up” cost savings programme, the company plans to cut 1,400 jobs worldwide and relocate a further 1,400 positions to countries with lower labour costs, Hanebeck said on a call after the results. #InfineonJobCuts
Infineon shares fell almost 6% in early trade, but by 0830 GMT had recovered to trade up 0.8%.
Jefferies analyst Janardan Menon said the so-called segment result – management’s preferred measure of operating profitability – of 734 million euros exceeded his expectations, and that it was positive the company was forecasting growth in all business areas in the fourth quarter versus the third.
