STMicroelectronics set to cut 3,000 jobs outside Asia by the middle of next year to cut cost. STMicroelectronics said the restructuring would cost $100 million to $130 million and help it save $90 million a year.

STMicroelectronics, which is relocating parts of production to Asia to cut costs, said an extra 1,700 to 1,800 jobs would go on top of the 1,200 to 1,300 previously announced. The 3,000 jobs correspond to 6 percent of STMicroelectronics' work force.

"The moves reposition the company's cost structure in the competitive environment of the industry, characterized by the slowing growth rate of demand and by the continued weakness of the dollar, which especially impacts European-based companies," STMicroelectronics said in a statement.

The announcement comes after the Franco-Italian group made a loss in the first quarter. STMicroelectronics is struggling to improve margins as the bulk of its sales are denominated in U.S. dollars and a large part of its cost base is still in euros.

"This is encouraging but not totally surprising," one London analyst said. "Sadly, STMicro have been hit by the strength of the euro and their new products, in which they have invested quite a lot, have not been selling as well as expected."

By: DocMemory
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