AutoBeta(AutoBeta.net)08/07 Report--

Infineon, a German chipmaker, announced on Aug. 5 that it would cut 1400 jobs worldwide. At the same time, it announced the relocation of 1400 other jobs at the company to countries with lower labor costs. It is understood that some of the layoffs are hundreds of jobs at the company's plant in the southern German city of Regensburg. In fact, Infineon's layoffs are not surprising. Back in May, officials revealed in an email statement that they planned to cut three-digit jobs at the Regensburg plant in Germany.

Of course, Infineon's layoffs have something to do with the current weak demand for products in the automotive industry and lower-than-expected revenue performance. Infineon's revenue in the third quarter was 3.702 billion euros, down 9% from the same period last year, according to the latest financial figures released by Infineon. On the profit side, Infineon's net profit in the third quarter was 403 million euros, down 52% from a year earlier. The profit margin was 19.5%, down 6.6 percentage points from 26.1% in the same period last year. Or in the face of declining revenue and net profit, Infineon has to lay off staff to save costs.

For the future, Infineon expects revenue of about 4 billion euros in the fourth quarter of 2024 and departmental profit margins of about 20 per cent. The full-year revenue forecast will be adjusted to about 15 billion euros, with an adjustment range of 400 million euros up and down. It is understood that there have been two official downgrades, and the current full-year revenue estimate has been reduced by 2 billion euros compared with the initial forecast. In response to the poor situation in the third quarter, Infineon CEO Jochen Hanebeck responded that the recovery in our target market is slow. A long period of weak economic momentum has caused inventory levels in many areas to exceed terminal demand.

Data show that Infineon is one of the world's leading semiconductor companies, specializing in the production of automotive chips of the European chip manufacturers. The semiconductor division of Siemens Group, formerly known as Siemens, was independent in 1999 and listed in 2000. The company's business scope is mainly to serve automobile manufacturers. Its core product is Automotive Microcontroller (MCU). It is understood that the microcontroller is a key component of the automotive industry, which controls and monitors various systems in the automobile. Infineon has also established a lot of industrial chains in China, covering R & D, production, sales, marketing, technical support and other fields, and has cooperation with some domestic car companies. For example, in 2018, SAIC announced the establishment of a joint venture with SAIC Infineon Automotive Power Semiconductor (Shanghai) Co., Ltd., headquartered in Shanghai, and its production base is located in the Wuxi plant expansion project of Infineon. The main purpose of the joint venture is to manufacture power modules for the electric vehicle market.

It is worth mentioning that with the acceleration of the electrification process, not only Infineon is facing the dilemma of weak product demand. Many auto parts giants are also facing poor sales and falling profits, and have had to start layoffs in order to survive. A few days ago, Intel, a global chip giant, announced plans to cut 15000 employees, accounting for more than 15 per cent of the company's total workforce, and will complete layoffs within this year.

Intel said the job cuts were aimed at fundamental change and would restructure the entire company's structure and operations, with plans to cut operating expenses and capital expenditure by at least $10 billion next year. At the same time, dividends to shareholders will be suspended from the fourth financial quarter, hoping to promote the transformation of the mode of operation and reverse the long-term losses in the chip manufacturing business. Intel's revenue in the second quarter of this fiscal year was $12.8 billion, down 1% from a year earlier, and a net loss of $1.6 billion in the second quarter, according to relevant data.

With the rapid development of electric vehicles, the electrified transformation also has a great impact on the traditional automobile enterprises and the supply chain, and the traditional auto parts suppliers are facing great pressure. Since 2024, many traditional automobile suppliers have made layoffs to preserve their strength. On January 17th, ZF announced plans to cut 12000 jobs in Germany over the next six years. On January 19th Valeo announced that it would cut 1150 jobs worldwide in order to improve the group's competitiveness and efficiency in the context of car electrification. On the same day, Bosch announced that it would cut 1200 jobs by 2026 due to sharp increases in energy and raw material costs, recession and high inflation. German auto parts maker Continental Group announced on February 14th that it plans to cut about 7150 jobs by the end of next year in order to improve the competitiveness of its business. French auto parts supplier Forvia announced plans to cut up to 10000 jobs over the next five years.

Of course, layoffs can reduce the expenses of enterprises to some extent, but if you want to survive in the current fierce competition, it is more critical to speed up the pace of change.

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