Franco-Italian chipmaker STMicroelectronics is considering reducing its workforce by up to 3,000 employees in France and Italy, Bloomberg reported citing sources.

This move is said to be part of a restructuring programme aimed at addressing a prolonged demand slump in the industrial and automotive sectors.

The company is exploring early retirements and attrition as potential strategies for workforce reduction.

The potential job cuts, which could be announced soon, are expected to impact between 2,000 and 3,000 workers.

Although the decision is not final, the company is said to be in discussions with unions about voluntary headcount reductions as part of a $300m (€294m) cost-cutting initiative.

CEO Jean-Marc Chery mentioned the intention to open talks with unions during the company’s fourth-quarter earnings call last week.

The news publication quoted FIOM CGIL union head in Brianza Pietro Occhiuto as saying that STMicroelectronics has proposed an early retirement plan to the European Works Council.

The plan suggests reopening one position for every three employees opting for early retirement.

In May 2024, STMicroelectronics received a €2bn grant from the Italian government to build a microchip plant, expected to create 3,000 new jobs.

The company, with a 27.5% share held by the French and Italian governments, employs 50,000 people globally.

The restructuring plans, first announced in November 2024, involve shifting production from older plants to advanced facilities in Crolles, France, and Agrate, Italy.

In June 2023, STMicroelectronics and Chinese company Sanan Optoelectronics joined forces to set up a joint venture (JV).

The new $3.2bn facility will be located in Chongqing, China and focus on 200mm silicon carbide (SiC) device manufacturing.

ST said the new SiC fab expects to begin production in the fourth quarter of 2025, with completion of the buildout scheduled in 2028.