ST to cut workforce by 400 to 450 this year

ST Microelectronics is planning to cut its workforce by between 400 and 450 workers this year, the government has been informed by the management.

Finance Minister Tonio Fenech, who met the management of the Malta plant this morning, said it was expected that up to 300 would leave the company through natural wastage, including those whose contract expired and those who reached retirement age.

The minister this afternoon also met a GWU delegation.

Mr Fenech said ST had seen a drop of between 30% and 40% in international demand and the group needed to reduce its production capacity.

Malta, he said, was the only backend plant in Europe and the management was mindful of the cost differential between operations here and other plants in Asia.

The management recognised, however, that the Malta plant is still relevant technologically and, significantly, would try to retain current production levels.

The minister said the utility tariffs were not the major issue in Malta, since the energy bill was comparable to other ST plants – the main issue was salaries.

The minister said the government, the GWU and the company would continue to meet to monitor the situation.

The minister said he was also holding meetings with other companies hit by the international recession and the government was willing to give direct support where necessary.

Mr Fenech said in reply to a question that in situations such as this, the ETC informed the banks, which always allowed a moratorium on house loan repayments by workers who lost their job.

The GWU in a statement said it would work with the company and the governemnt to ensure that the number of dismissals would be as small as possible. The union will next week be represented as a meeting in Paris of the European Works council of ST employees.