June 23, 2011 08:49 ET

ST-Ericsson Announces New Cost Savings Plan

PLAN-LES-OUATES, SWEDEN and GENEVA--(Marketwire - Jun 23, 2011) -

  * Plan aimed to achieve $120 million of annualized savings by end of 2012
  * Includes global workforce review that may affect up to 500 employees
  * Company also pushes out target for break-even based on current

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.

"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.

About ST-Ericsson

ST-Ericsson is a world leader in developing and delivering a complete portfolio of innovative mobile platforms and cutting-edge wireless semiconductor solutions across the broad spectrum of mobile technologies. The company is a leading supplier to the top handset manufacturers and generated sales of $2.3 billion in 2010. ST-Ericsson was established as a 50/50 joint venture by STMicroelectronics (NYSE: STM) and Ericsson (NASDAQ: ERIC) in February 2009, with headquarters in Geneva, Switzerland.

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.

Press release:

This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: ST-Ericsson via Thomson Reuters ONE


Contact Information

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    Carol Streitberger Brighton
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    Roland Sladek
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    Kristina Embring Klang
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    Celine Berthier
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