German chipmaker Infineon CEO Jochen Hanebeck said on August 5 that as part of a previously announced cost-saving plan, Infineon will cut 1,400 jobs globally and move another 1,400 jobs to countries with lower labor costs.

The cuts include the elimination of hundreds of jobs at the company's earlier announced plant in the southern German city of Regensburg.

"We are ruling out compulsory redundancies in Germany," Jochen Hanebeck said after the latest results were announced.

Infineon's latest report narrowed its 2024 forecast range after the company missed revenue expectations in the fiscal third quarter amid a stalled recovery in markets such as electric vehicles.

Infineon reported third-quarter revenue fell 9.5 percent from a year earlier to 3.702 billion euros ($4.04 billion), below the 3.8 billion euros forecast provided by the company, but rose 2 percent from the previous quarter thanks to growth in its power and sensor systems divisions. The division's results increased 4% sequentially to 734 million euros, with a performance margin of 19.8%, which was higher than expected.

"The recovery in our target markets has been slow. The prolonged weak economic momentum has led to inventory levels exceeding end demand in many regions, "said Hanebeck." In addition to managing the current demand cycle, we are working to further strengthen our competitiveness."

"In what remains a challenging market environment, Infineon continues to maintain good momentum," said Jochen Hanebeck. He added that the company is further enhancing its competitiveness through a cost-saving plan announced earlier this year.

The automotive electronics business, Infineon's largest, posted sales of 2.11 billion euros in the fiscal third quarter, compared with 2.13 billion euros in the same period last year. The company noted that the figure was an improvement from the previous quarter, helped by an increase in the number of "software-defined" vehicles. The cars use Infineon chips to help run systems that connect sensors and computers inside the car.

Infineon said fourth-quarter revenue would fall to about 4 billion euros compared with the same period last year, and it expects a segment margin of about 20 percent. Analysts had expected revenue of 3.94 billion euros and a segment margin of about 22 percent.

For the full year, Infineon expects fiscal 2024 revenue of around 15 billion euros, compared with its previous forecast of 15.1 billion euros ($16.3 billion), plus or minus 400 million euros.

In addition, analysts believe that Infineon's fiscal year 2025 revenue growth of 12% remains challenging. Revenue in the fiscal third quarter missed analysts' expectations, while electric vehicle sales in China have held up relatively well on the back of subsidies and discounts, but sales growth is expected to be unsustainable as vehicle inventories build.

Infineon is one of the European chipmakers focused on making chips for cars and relies on sales from automakers. The company, along with peers such as ST and NXP Semiconductors, has been hurt by the auto industry's pullback from electric vehicles, which in turn has been driven by higher interest rates, slower-than-expected economic growth and a continued lack of charging stations.

According to the official website, Infineon's revenue in the fiscal year 2023 (as of September 30) exceeded 16 billion euros and the number of employees worldwide was about 58,600.