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Infineon ponders makes 5000 job cuts

DRAM division safe, apparently

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Updated Infineon has confirmed earlier reports that it plans to cut up to 15 per cent of the company's workforce - 5000 staff in total.

The scheme was discussed at a supervisory board meeting yesterday. Infineon's goal is to save one billion euro ($882 million) over the next 18 months.

The move follows the company's Q3 figures, announced this week, which showed a loss of 598 million euros ($526 million), well down on the E366 million profit it made in the same period, last year. Q3 2001 sales were down 30 per cent, squashed by the slump in demand for semiconductors.

That leaves Infineon with little choice but to scale back production and try to weather out the depression. According to the FT's sources, any job cuts that are made will be drawn from across the company rather than from specific plants, though some facilities are expected to be shut down completely.

Curiously, Infineon's DRAM production is not expected to be cut. That suggests Hynix may yet prove to be the only major memory maker willing to trim output. So does Infineon's decision indicate that the company is optimistic about a recovery in the memory market? We reckon not. It's as much about maintaining work on the company's next-gen. DRAM plant in Dresden, which is expected to yield significant costs savings through a more efficient production process.

Infineon also has an extra $1.3 billion to play with, gained through the sale of 60 million new shares last week. ®

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