[News] European Chip Giants NXP and STMicroelectronics Plan Layoffs Amid Market Downturn

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As demand for automotive and industrial semiconductors continues to weaken, European chipmakers NXP and STMicroelectronics are preparing for workforce reductions, according to reports from ijiwei and Bloomberg.

As noted by the report from ijiwei, citing NL Times, Dutch semiconductor company NXP announced that it may reduce its global workforce by up to 1,800 positions due to rising market pressures, as European Union ministers convene to discuss trade relations with the U.S.. The company, with major operations in Eindhoven, Nijmegen, and Delft, acknowledged that it cannot fully prepare for potential trade restrictions in the short term, as stated in the report

The report indicates that the decision is not entirely driven by concerns over a potential trade war but is also influenced by broader market conditions. NXP expects the layoffs to account for no more than 5% of its global workforce. With more than 34,000 employees worldwide, including approximately 2,500 in the Netherlands, the job cuts will impact hundreds of positions globally, as noted in the report.

An NXP spokesperson, as cited in the report, points out that import tariffs could lead to higher prices, which may suppress demand. NXP manufactures semiconductors for various internet-connected devices, with some of its products being particularly sensitive to economic fluctuations. As the report further emphasizes, the company has had to adapt to the decline in demand for automotive chips, a key segment of its business.

NXP’s financial report for the fourth quarter of 2024 revealed revenue of USD 3.11 billion, marking a 9% year-on-year decline. Full-year revenue for 2024 was USD 12.61 billion, down 5% from the previous year.

STMicroelectronics Also Considers Workforce Reductions

Meanwhile, according to Bloomberg, STMicroelectronics NV is also considering reducing its workforce by up to approximately 6% through early retirements and natural attrition. The Franco-Italian chipmaker is taking these measures to address a sustained decline in demand across the industrial and automotive sectors, as the report from Bloomberg points out.

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(Photo credit: NXP)