Infineon reports first success of its Impact program: Cost reduction measures are taking effect
After only two months Infineon has begun to realize significant savings in the Purchasing and Logistics areas which should amount to several hundreds of million Euro. Expenses in information technology have already been reduced by one third. In addition, Infineon reduced its planned capital expenditures for the coming fiscal year (starts October 1, 2001) by almost Euro 600 million, with the goal of cutting the existing budget of Euro 1.5 billion in half. The cuts will not effect Infineons strong technology leadership and Infineon will maintain its leading cost position.
As previously announced, Infineon is planning to reduce the worldwide workforce by about 5000 employees. Measures on the personnel side are well under way. By the end of calendar year 2001, the company will have shed approximately 2400 jobs, of which about 1900 are outside Germany and 500 inside Germany. Infineon expects only moderate restructuring costs for the further staff reductions. Short-time work schedules will be introduced in the Regensburg and Munich (Perlach) plants as of October.
From a capital increase in July, Infineon received proceeds of Euro 1.5 billion. In addition, the company received Euro 700 million from the sale of its infrared business and its share in the joint venture with Osram.
Infineon has a healthy balance sheet, a significant positive net cash position and available credit lines of approximately Euro 2 billion explained Dr. Ulrich Schumacher, President and CEO of Infineon Technologies. We have no current need or plans for further financing activities."
With the reduction in capital spending in the current year, and the planned reduction of almost Euro 600 million for capital expenditures in the next fiscal year, along with the cost savings from the Impact program, and proceeds from divestments and the capital increase, Infineon is on a solid financial basis to meet the current market situation. Having taken these steps, Infineon is also able to continue its technological leadership in the areas of communications, automotive and memory products. Infineons leadership in 300mm technology will add to the companys competitive advantage.
These measures have helped us counteract the existing difficult market conditions and we will emerge strengthened from the worldwide downturn in the semiconductor market, explained Dr. Schumacher.
Infineon Technologies AG, Munich, Germany, offers semiconductor and system solutions for applications in the wired and wireless communications markets, for security systems and smart cards, for the automotive and industrial sectors, as well as memory products. With a global presence, Infineon operates in the US from San Jose, CA, in the Asia-Pacific region from Singapore and in Japan from Tokyo. In the fiscal year 2000 (ending September), the company achieved sales of Euro 7.28 billion with about 29,000 employees worldwide. Infineon is listed on the DAX index of the Frankfurt Stock Exchange and on the New York Stock Exchange (ticker symbol: IFX). Further information is available at www.infineon.com