By Mauro Orru

STMicroelectronics said it would cut nearly 3,000 jobs through 2027 as the European chip maker seeks to revamp its fortunes after months of lackluster sales.

The group said up to 2,800 employees would leave the company, mainly in 2026 and 2027. STMicroelectronics employed 49,602 people at the end of 2024, according to its latest financial report.

The company said it would handle the departures through voluntary measures, meaning that employees, particularly those nearing retirement, would be offered an incentive to leave. Negotiations with employees' representatives will also take place.

STMicroelectronics is seeking to secure its footing as much of the semiconductor industry grapples with sluggish demand for legacy chips.

While appetite for chips to power the data centers behind the artificial-intelligence boom continues to thrive, demand for legacy semiconductors found in cars, industrial equipment and other devices has been subdued in recent months.

STMicroelectronics downgraded its guidance several times last year and said in January that it was forecasting revenue of about $2.51 billion for the first quarter, down nearly 28% on year. The projection came in below analysts' expectations, sending shares down on Jan. 30 when the company reported 2024 earnings.

In October, the company launched a program to reshape its manufacturing footprint and cut costs. Chief Executive Jean-Marc Chery said then that the move would bring annual cost savings in the high triple-digit million-dollar range at the end of 2027.

Investments through 2027 will focus on advanced manufacturing infrastructure for the latest generation of chips, the company said.

The layoff announcement came hours after STMicroelectronics said it was fully behind its chief executive after an Italian government minister criticized management amid a board nomination feud.

Italian Economy and Finance Minister Giancarlo Giorgetti said in a press conference that Rome was withdrawing its support for Chery after the company rejected Italy's nomination of Marcello Sala, head of a department at the ministry, to STMicroelectronics' supervisory board.

Giorgetti said the rejection was "incomprehensible, very serious and unacceptable." The nomination came weeks after STMicroelectronics said Maurizio Tamagnini, vice chairman of the company's supervisory board and former chair, was stepping down from his role.

"The behavior of the Italian shareholder will from now on be one of critical opposition," Giorgetti said. STMicroelectronics didn't respond to a request for additional comment on the board feud.

Formed in 1987 from the combination of the semiconductor business of Italy's SGS Microelettronica and the non-military business of France's Thomson Semiconducteurs, STMicroelectronics has become a fixture of Europe's semiconductor scene. The company, in which Italy and France hold a combined stake of nearly 28%, counts Apple, Samsung Electronics and Tesla among its customers.

Giorgetti said that members of STMicroelectronics' management team had sold their shares in the company on the eve of the latest earnings release.

STMicroelectronics said the accusations were false, adding that stock sales had been done during the company's blackout period by a stock plan administrator in compliance with Swiss tax rules. STMicroelectronics' headquarters is located in Geneva, Switzerland.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

April 10, 2025 09:24 ET (13:24 GMT)

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