LONDON—STMicroelectronics NV has said it will stop developing products for the set-top box and home gateway markets and plans to lay off up to 1,400 workers out of its total headcount of more than 43,000.
In 2016 that workforce "re-alignment" is expected to affect about 1,000 employees of which about 150 are based in France. Going forward ST intends to focus on automotive and industrial applications and the Internet of Things including such areas as smart home and smart city applications.
ST's business-change announcement comes alongside the announcement of the company's fourth quarter and full year 2015 financial results and a re-organization that sees the elimination of ST's digital products group business unit. Starting in the first quarter of 2016 ST comprises three product groups. These are; automotive and discrete led by Marco Monti; microcontrollers and digital ICs led by Claude Dardanne; and analog and MEMS group led by Benedetto Vigna.
DPG goes but digital ASICs and imaging continue. (Source: STMicroelectronics)
Jean-Marc Chery, who had led the digital products group, continues with the company in his role as chief operating officer. ST had said back in May 2015 that it was "considering options" for its digital products group, which was widely interpreted to mean a sale or closure.
ST said it would "re-align" about 1,400 workers including 670 in Asia, 430 in France and 120 in the United States although these moves were subject to negotiations and local applicable laws. At the same time ST wants to redeploy about 600 employees, currently associated with the set-top-box business to work on digital automotive and microcontrollers. The cost of the restructuring is estimated at $170 million and is expected to produce of $170 million of annual cost savings.
Although ST has eliminated its digital products group and is exiting STB and home gateway it is continuing with its digital ASICs and imaging business, which have been moved into the new microcontrollers and automotive groups.
In 4Q15 ST had sales of $1.67 billion, down 8.8 percent from $1.83 billion in the same quarter a year ago. The net profit was $2 million, down from $43 million a year before. This weak quarter contributed to a 2015 full-year revenue of $6.9 billion, down 6.9 percent from $7.40 billion in 2014.
The company said the outlook for 1Q16 is for revenues to decrease by 3 percent on a sequential basis plus or minus 3.5 percent.
"Over the next years, the main growth contributors to the semiconductor market will be automotive, industrial and Internet of Things applications. We are deeply focused on winning in these markets and on capturing the opportunities they represent to fuel growth for
ST, starting from 2016," said Carlo Bozotti, CEO of ST, in a statement.
—Peter Clarke covers business news and analog for EE Times Europe.
Article originally published on EE Times Europe.