Today, June 5, 2025, Jean-Marc Chery, CEO of STMicroelectronics, announced that the company expects up to 5,000 employees to leave the company over the next three years. This includes 2,800 layoffs announced earlier this year. This news shook the entire semiconductor industry, as it not only reflects the unprecedented challenges that STMicroelectronics is facing, but also perhaps reveals that the global semiconductor industry is undergoing a deep structural adjustment. The editor of China Exportsemi will try to enter into an in-depth analysis and interpretation of this matter.
Ⅰ Layoffs triggered by a "slippery" in performance: STMicroelectronics' structural pains
STMicroelectronics, one of Europe's largest semiconductor manufacture companies, employs around 50,000 people worldwide and has a 27.5% shareholding structure held by the Italian and French governments together through their respective holding companies. For a long time, the company has strong competitiveness in automotive electronics, power semiconductors, industrial control and other market segments. However, since 2023, its operating performance has continued to be under pressure, and its financial performance has deteriorated rapidly.
According to ST's 2024 financial report, the company's annual revenue was US$13.27 billion, down 23.2% year-on-year; Operating margin plummeted to 12.6% from 26.7% in 2023; Net profit fell sharply by 63% to only $1.56 billion. Among them, fourth-quarter revenue decreased 22.4% year-on-year to $3.32 billion. In terms of business, revenue from MCU (microcontrollers) decreased by 30.2%, and revenue from digital IC and RF products decreased by 22.8%. High inventories and weak end-use demand were the main suppressing factors, and the company's woes were further exacerbated by an unexpectedly sluggish demand in the European industrial and automotive markets.
In addition, the competition pattern of the global semiconductor market is accelerating its reconstruction. International competitors such as Infineon, Onsemi, and Renesas continue to launch high-value-added products such as next-generation power chips and automotive-grade SoCs, competing for market share in emerging application scenarios such as electric vehicles, ADAS, and renewable energy. In contrast, ST is slightly lagging behind in the layout of some core technologies and the pace of transformation of advanced processes, and its market share in traditional advantageous fields has gradually been eroded.
Pictured: STMicroelectronics faces major layoffs
Ⅱ The full picture of layoff planning: from financial self-help to manufacturing restructuring
ST's layoff plan includes 2,000 resignations through natural attrition, and the remaining employees will mainly leave voluntarily. Geographically, Italy and France have become the hardest hit areas.
In Italy, 1,200 jobs are planned to be eliminated. The Agrate plant has borne the brunt of the layoffs. The Italian government has questioned Cheri's leadership and launched an investigation into alleged insider trading, while trying to limit the layoffs to 1,000 people. Local trade unions have also spoken out against it and called on the government to intervene, and there are many obstacles to the implementation of the layoff plan.
In contrast, layoffs in France have been relatively smooth, with the company planning to cut 1,000 jobs there, which has not yet caused a large-scale social repercussion.
The layoffs are not isolated, but part of a broader restructuring of ST's organizational structure and production line restructuring. In November 2023, the company had a cost-cutting plan in place with the goal of saving hundreds of millions of dollars by 2027, and layoffs were one of the core means to achieve that goal.
Notably, the company is accelerating the shift of manufacturing focus to more advanced process nodes. In the future, ST will concentrate its manufacturing resources on 300mm (12-inch) silicon wafer factories in Agrate (Italy) and Crolles (France), and strengthen the production capacity of 200mm silicon carbide (SiC) wafers in Catania, Italy, to comprehensively promote the construction of high-end process platforms. These adjustments will help optimize the manufacturing cost structure, improve product yield, and enhance global competitiveness in strategic areas such as automotive power devices and high-performance sensors.
Ⅲ Future-proof technology investment: Finding opportunities in crisis
Despite the layoffs, ST has not cut back on its investment in technology research and development. According to the company's plan, from 2025 to 2027, it will continue to invest in advanced process processes, including R&D and manufacturing platforms for 12-inch silicon-based chips and 8-inch silicon carbide power devices.
In terms of product direction, ST focuses on two tracks:
1. Automotive: including high-voltage power modules, low-power controllers, and intelligent sensor systems for autonomous driving and electrification. ST plans to deepen cooperation with Bosch, Tesla and other car companies to strengthen the layout of automotive-grade SiC devices.
2. IIoT and edge AI: Focusing on low-power, edge computing chips, such as the STM32 MCU series, will continue to be updated to support AI-accelerated instruction sets.
At present, third-generation semiconductor devices such as silicon carbide are widely used in the new energy vehicle and photovoltaic inverter market, and ST is trying to seize this wave of growth dividends and open up the situation with technological leadership.
Ⅳ Industry impact: reshuffle and accelerated concentration
ST's layoffs have sparked widespread concern in the industry, and the impact goes far beyond the company itself.
First of all, it marks that the global semiconductor industry is undergoing a new round of reshuffle. IDC and other research institutions pointed out that the global semiconductor market size will decline by about 10% year-on-year in 2024, which is another contraction cycle after continuous adjustment in 2023. Under the pressure of weak demand and inventory, more medium-sized manufacturers may be forced to shrink their fronts and sell non-core businesses, and industry mergers and acquisitions will accelerate.
Secondly, the concentration of the industry will be further improved. In the context of increasingly high capital and technology thresholds, leading companies such as TSMC, Intel, Samsung, etc. will be easier to obtain customers and orders, while enterprises in the middle and waist will have a narrower living space if they do not have differentiated competitiveness.
Finally, from the perspective of technology trends, the market is moving from traditional general-purpose chips to customized, high-performance, green and low-carbon. Although ST's large-scale layoffs are passive, its active transformation in manufacturing structure adjustment and R&D investment also sends a clear signal: only by quickly adapting to the changes in the technology cycle and laying out cutting-edge processes in advance can the company gain the initiative to survive and develop.
Ⅴ Conclusion: The alarm is sounded — change is the only constant
Laying off 5,000 employees is a painful but necessary choice for STMicroelectronics. The editor of China Exportsemi believes that it is not only a "broken wrist survival" in response to the financial crisis, but also the starting point of corporate strategic transformation. In the short term, cost-cutting measures can help stabilize financial fundamentals; In the medium to long term, focusing on emerging technologies such as advanced processes and SiC is the key to getting out of the cycle trough and winning the next growth window.
For the entire semiconductor industry, this wave of layoffs is not an isolated event, but a microcosm of the global industrial chain reshuffle. Only by maintaining flexibility in strategy, continuous innovation in technology, and daring to adjust in organization can enterprises navigate through fluctuations and seize new opportunities.
The core question behind this "downsizing" is not the reduction itself, but whether the company can truly complete the transition from traditional manufacturers to technology-driven companies. The next three years will be a period of transformation for STMicroelectronics and the entire industry. Whoever can take the lead in running through the closed loop of "technology-market-organization" will be able to lead the next round of semiconductor prime time.
