STMicroelectronics, the Franco-Italian semiconductor giant, will see 5,000 employees leave the company over the next three years, its Chief Executive Officer Jean-Marc Chery confirmed on Wednesday. The revelation came during Chery’s remarks at an event hosted by BNP Paribas in Paris, where he elaborated on the firm’s ongoing cost-cutting efforts amid a sluggish global semiconductor market.

The figure includes 2,800 job cuts already announced earlier this year, while the remaining 2,000 are expected to occur through natural attrition. "At the end, it's 5,000 people that will leave the company," Chery stated, emphasising the combined effect of planned redundancies and voluntary departures on the firm’s global workforce.

STMicroelectronics, which employs approximately 50,000 people worldwide, is jointly owned in part by the French and Italian governments, which together hold a 27.5% stake in the company via a public investment vehicle.

The company’s cost-cutting strategy, first detailed in November last year, aims to save hundreds of millions of euros by 2027, and includes not only layoffs but also early retirement schemes and natural attrition. In April 2024, STMicroelectronics specified that 1,000 jobs would be cut in France through voluntary departures, as part of the 2,800 non-attrition reductions. However, discussions with Italian authorities over the scale and pace of job cuts in Italy remain unresolved.

During the BNP Paribas event, Chery acknowledged the challenges posed by Italy’s stance, without naming the country explicitly. “I do think that one country specifically is harder. And most likely, okay, could delay a little bit our speed of implementation,” he said, alluding to the ongoing negotiations with the Italian government.

Italy’s reaction to the restructuring has been particularly critical. In recent months, Italian government officials have expressed dissatisfaction with STMicro’s leadership, particularly CEO Chery, against the backdrop of sustained market downturns. The situation escalated with allegations of insider trading aimed at Chery—a charge that the company has firmly denied.

While tensions with Italy persist, the CEO indicated that dialogue with key stakeholders and authorities across regions is continuing and that the implementation of the programme remains broadly on track.

Despite the downsizing, Chery offered a cautiously optimistic outlook for the business, noting that signs of a market upturn were beginning to emerge this year. The global semiconductor industry, which faced a major correction following pandemic-era supply chain issues and reduced consumer electronics demand, has shown early signals of stabilisation.

STMicroelectronics, known for supplying chips to sectors including automotive, industrial equipment, and consumer electronics, has been under pressure from both investors and governments to adapt quickly to shifting economic conditions. The combination of workforce reduction, operational efficiency, and technology reinvestment is expected to help the company weather the downturn and position itself for future growth.