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German chip maker Infineon said on Auguest it will slash 1,400 jobs and relocate an additional 1,400 roles to countries with lower labor costs.

The job cuts, from a workforce of about 58,600 worldwide, are part of a company-wide restructuring that was launched in May.

The company’s CEO, Jochen Hanebeck, said the job-related decisions form part of a previously announced cost-cutting program called ‘Step Up’ which Infineon is hoping will bring about approximately €1bn ($1.1bn) of annual savings by 2027.

The news comes after US chip giant Intel announced last week it will slash more than 15 percent of its workforce as it seeks to cut about $20 billion in expenses this year.

Infineon reported a net profit of 403 million euros ($441 million) in the three months to the end of June, down 52 percent from a year earlier. Revenues came in at 3.7 billion euros, down from about 4.1 billion a year earlier.

The group downgraded its outlook for 2024, and now expects revenues of around 15 billion euros. That is the third downgrade in recent times, with Infineon having earlier expected sales of about 16 billion euros.

"The recovery in our target markets is progressing only slowly," said Hanebeck. He referred to "prolonged weak economic momentum" but insisted that Infineon continues to "hold up well" in a "challenging" market environment.

Revenues in its "green industrial power" and "power and sensor systems" divisions fell heavily in the quarter from a year earlier but sales in its automotive division were stable.

Editor：Vicky

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