German semiconductor maker Infineon Technologies AG said Thursday that it would cut "roughly 5,000" jobs as part of a restructuring plan to cut costs by about 1 billion euros (US$880 million) over the next 12 to 18 months.
Continued weakness in the technology sector is forcing the company to restructure its business processes, Infineon said. The restructuring plan, dubbed "Impact", will affect procurement, logistics, IT and manufacturing functions at various units worldwide. Which locations and jobs will be hit will be determined in the coming weeks, the company said in a statement.
Infineon, a spin-off of German electronics and engineering conglomerate Siemens AG, employed 34,600 people worldwide at the end of June. The plan announced Thursday calls for 5,000 jobs to be cut.
"This doesn't mean that 5,000 people will be laid off. There also is a freeze on new hiring and we are not replacing personnel lost through attrition," said Gunter Gaugler, a spokesman for Infineon.
Infineon had already announced an initial round of cost-cutting measures in June, including the hiring freeze, a 500 million-euro reduction in capital expenditures for the current fiscal year, and investment cuts of over 1 billion euros for next year.
On Monday Infineon reported a net loss for its fiscal third quarter of 371 million euros, compared with a profit of 266 million euros in the year-ago period. The company expects to post a net loss for its current fourth quarter as well as for the full fiscal year 2001 ending Sept. 30.