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Compromise in Leadership Dispute ST Microelectronics Withdraws Layoff Plans in Italy

From Sebastian Gerstl | Translated by AI 2 min Reading Time

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STMicroelectronics

In the dispute over the direction of the Italian-French chip manufacturer ST Microelectronics, the Italian side has achieved a partial victory: According to local media, the originally planned 1,500 layoffs at the Catania and Agrate sites will not take place.

View of the production site of ST Microelectronics in Agrate, Italy. Unlike the plans announced in April, no layoffs will be carried out at the Italian plants in Agrate and Catania.(Image: ST Microelectronics)
View of the production site of ST Microelectronics in Agrate, Italy. Unlike the plans announced in April, no layoffs will be carried out at the Italian plants in Agrate and Catania.
(Image: ST Microelectronics)

In April, ST Microelectronics announced plans to cut approximately 2,800 jobs as part of restructuring measures. This prompted massive protests from the Italian Chamber of Commerce, as Italian sites would be disproportionately affected by these job cuts. According to Italian media reports, only 1,000 positions would be affected on the French side, while the Italian plants in Agrate and Catania alone would face 1,500 layoffs.

The debate is part of an ongoing conflict between representatives of the Italian and French governments, both of which hold stakes in the European chip manufacturer. As early as February, there were calls from the Italian side for the dismissal or resignation of CEO Jean-Marc Chery. Specifically, Adolfo Urso, Italy's Minister for Economic Development, and representatives of the Italian Ministry of Trade see an unfair shift of the company's interests toward France under Chery's leadership.

The Italian Ministry for Enterprises and Made in Italy (Ministero delle imprese e del Made in Italy) has now announced that the layoff plans have been scrapped. This is reported by the news agency Reuters as well as local Italian media. Accordingly, no layoffs will be carried out at the mentioned sites. Instead, ST Microelectronics plans to reduce redundancies by 2032 through expiring contracts and voluntary exits.

"This is a step forward and in the right direction, recognizing the value of the workers and the production site," commented Adolfo Urso on the development. It was further confirmed that investments of $4.3 to $5.4 billion are still planned at the Agrate and Catania sites, in line with the EU Chips Act 2.0. $2.1 million of this amount are expected to come directly from Italian state funds.

According to Urso, Catania will specifically rise to become "Europe's center for silicon carbide" through these investments. By 2027, production capacities at the sites are expected to increase by 31%, report certain local media.

ST Microelectronics has confirmed this development to Reuters. "This decision reflects the spirit of collaboration that has characterized the discussions so far, but it also requires all parties to be willing to take a concrete and collective step forward," the news agency quoted a company spokesperson. With the growth of the electric mobility market during the current fiscal year, the company has been less affected by current market conditions than feared at the beginning of the year, thanks to the expansion of the silicon carbide segment.

As ST further reported to Reuters, the possibility of expanding the Agrate site in 2027 is on the table. (sg)

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