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| Friday, 24 June 2011, 10:00 HKT/SGT | |
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Source: ST-Ericsson | |
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GENEVE, CH, June 24, 2011 - (ACN Newswire) - ST-Ericsson, a joint venture of STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC), today announced that due to recent changes in the business environment and reduced demand for legacy products at certain customers, it will launch a cost savings plan to achieve about $120 million of annualized savings by the end of 2012.
- Plan aimed to achieve $120 million of annualized savings by end of 2012
- Includes global workforce review that may affect up to 500 employees worldwide
- Company also pushes out target for break-even based on current visibility
"These actions while necessary to strengthen the financial position of the company, will not compromise the execution of our new products and delivery to our customers," said Gilles Delfassy, president and CEO of ST-Ericsson. "We continue to gain traction on our new product portfolio and remain steadfastly committed to leadership in the smartphone and tablet markets."
Also, while the company keeps its strong focus to improving financial performance, the company's path to profitability is expected to take longer, with the target break-even, based on current visibility, now planned later than the previously anticipated second quarter 2012.
The cost savings plan includes a global workforce review that may affect up to 500 employees worldwide. Specific country impact related to the plan and further details will be provided when employee representatives have been involved where required. Restructuring costs are estimated to be approximately $55 million, of which the majority is expected to be recorded during the second half of 2011.
The ST-Ericsson results reported in this press release do not reflect in their entirety the results of the Wireless Segment of STMicroelectronics, which include other activities that are not part of ST-Ericsson.
This press release contains forward-looking statements that involve inherent risks and uncertainties. We have identified certain important factors that may cause actual results to differ materially from those contained in such forward-looking statements. For a detailed description of risk factors see STMicroelectronics' (NYSE:STM) and Ericsson's (NASDAQ:ERIC) filings with the US Securities and Exchange Commission, particularly each company's latest published Annual Report on Form 20-F.
Contact:
Global Communications & Media Relations
Carol Streitberger Brighton, Geneva, Switzerland
Public & Media Relations
Roland Sladek, Geneva, Switzerland
Kristina Embring Klang, Lund, Sweden
Phone: +41 22 930 2733
Email: media.relations@stericsson.com
Investor & Analyst Relations
Fabrizio Rossini, Geneva, Switzerland
Phone: +41 22 929 6973
Email: investor.relations@stericsson.com
Topic: Business Plan
Source: ST-Ericsson
http://www.acnnewswire.com
From the Asia Corporate News Network
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