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European semiconductor heavyweight STMicroelectronics is facing mounting challenges on multiple fronts. As noted by The Wall Street Journal, the company plans to cut 2,800 jobs by 2027 in an effort to improve performance after several months of sluggish sales. STMicroelectronics stated that the job reductions will be handled through voluntary measures, and negotiations with employee representatives are also expected to take place.
Management Dispute with the Italian Government
Meanwhile, tensions between STMicroelectronics and the Italian government have intensified. As noted by Reuters, Italy’s Economy Minister Giancarlo Giorgetti publicly stated the government’s opposition to the current CEO and accused STMicroelectronics’ management of selling shares just one day before releasing weak earnings—raising concerns about potential insider trading.
In response, the company’s supervisory board denied any misconduct by the two managing board members involved and reaffirmed its commitment to continued investment in Italy. STMicroelectronics also issued an official statement expressing full support for its CEO, Jean-Marc Chery.
Additionally, Italy’s proposed nomination of Marcello Sala, a senior official at the economy ministry, to STMicroelectronics’ supervisory board has reportedly faced internal resistance, as indicated by Reuters.
STMicroelectronics Reaffirms Investments Amid Leadership Strains
Despite the controversy, STMicroelectronics has reaffirmed its long-term investment plans in Italy. As highlighted by Reuters, the company confirmed its planned developments at its facilities in Agrate (northern Italy) and Catania (Sicily). It also announced its goal to double production capacity at the Agrate site by 2027.
On January 30, STMicroelectronics reported its financial results for Q4 and the full year 2024, highlighting a difficult year for the company. It described 2024 as one of the worst years in decades for the industries it serves, particularly the industrial and automotive sectors.
The outlook for Q1 2025 also signals continued weakness. At the mid-point of its guidance, STMicroelectronics expects revenue to plummet by 27.6% year-over-year and decline by 24.4% quarter-over-quarter, underscoring ongoing challenges.
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(Photo credit: STMicroelectronics)
