Two prominent semiconductor companies, STMicroelectronics and Onsemi, are navigating challenging market conditions that have prompted significant management shifts and large-scale workforce reductions.

STMicroelectronics CEO Faces Pressure to Step Down as Demand Declines

STMicroelectronics NV, a French-Italian joint venture, is under pressure from the Italian government to remove its CEO, Jean-Marc Chéry, due to the company's underperformance amidst a broader industry downturn. Sources suggest the government believes Chéry's leadership has not been sufficient to mitigate the difficulties arising from weakening demand, particularly in the automotive and industrial semiconductor sectors.

STMicroelectronics, which supplies chips to high-profile companies like Apple and Tesla, is facing one of its toughest years in decades. The company described 2024 as one of the worst years for its key industries, with revenue expected to drop significantly in the first quarter of 2025. The company's stock has fallen by over 45% in the past year, further exacerbating the challenges.

As part of its efforts to navigate the downturn, the company is considering laying off up to 3,000 workers. In addition, Chéry has outlined plans to cut costs, including offering early retirement packages and voluntary departure plans to employees. These measures reflect the severe market slowdown that has forced the company to scale back its financial expectations.

Onsemi to Cut 2,400 Jobs Amid Slowdown and Focus on AI

Meanwhile, Onsemi, a semiconductor company based in Arizona, is also making adjustments to cope with declining demand, especially in the automotive sector, which accounts for half of its revenue. In response, Onsemi has announced plans to cut 9% of its workforce, amounting to 2,400 jobs, as part of a broader restructuring effort aimed at optimizing operations and reducing costs.

Onsemi's CEO, Hassane El-Khoury, has emphasized that while the company is reducing its workforce, it is maintaining its investment in research and development to stay competitive. This is particularly important as the company seeks to remain a strong player in the rapidly growing field of artificial intelligence (AI). Despite the layoffs, Onsemi is focusing on adjusting to the surging demand for power chips needed to support AI applications.

The company has reported a 15% drop in fourth-quarter revenue, citing continued weakness in the automotive market. Rising car prices have dampened consumer demand, contributing to the industry's downturn. However, El-Khoury has remained optimistic about Onsemi's future, asserting that the company's innovations in power chips will position it well as AI technology expands.

Industry-Wide Challenges and Strategic Shifts

Both companies are grappling with a semiconductor market that is facing prolonged weak demand. Automotive chipmakers are especially vulnerable, as high car prices have deterred many consumers. At the same time, competition in the semiconductor space continues to intensify, particularly from Chinese rivals.

As STMicroelectronics and Onsemi restructure and adjust their strategies, both companies are placing a strong emphasis on innovation in AI to ensure they remain competitive in an ever-evolving market. The ongoing layoffs reflect the severity of the industry's challenges, but both CEOs remain focused on reorganization efforts aimed at long-term stability and growth.

The semiconductor sector's struggle is a clear indication of the wider economic challenges facing many industries, where innovation and strategic adaptation will be key to surviving an uncertain global market.