Falling chip sales cost more jobs
One in ten go at STMicro
STMicro is laying off 4,500 people - one in ten of its workforce - and won't provide revenue guidance for next year until the market is clearer.
The company will cut $700m from expenses in 2009 by slashing jobs and "resizing" manufacturing operations. STMicro makes chips for industrial applications, set-top boxes and cars.
STMicro will cut 50 per cent from its capital expenditure, down to $500m.
The chipmaker said global uncertainty and the recession made it difficult to forecast demand: "Consequently, the Company will only provide approximate revenue and gross margin internal planning targets with respect to the first quarter of 2009.
"When visibility on market conditions improve, the Company will reconsider providing quantitative guidance similar to past practices."
The company brought in $10bn in 2007 but is predicting, for internal purposes, revenues for the next quarter to be between $1.5bn and $1.85bn.
STM will continue to work on its joint venture Ericsson Mobile Platforms. It will run its fabs at 50 per cent capacity in order to cut inventory levels.
Full statement here. ®