Chipmaker cuts up to 5,000 jobs

Infineon has been battered by the global chip slowdown

German semiconductor manufacturer Infineon said it planned up to 5,000 job cuts in a restructuring plan aimed at achieving savings of about 1bn euros (£616m; $880m) over the next 12-18 months.

Infineon, which earlier this week reported a third quarter operating loss of 598m euros, said it would look at savings in processes from purchasing to manufacturing.

The firm will also introduce short-time working, as well as laying off staff.

The firm, which was spun off from engineering giant Siemens in 1999, has been battered by the dramatic slowdown in global chip demand.

"Regrettably a cost-savings programme on this scale inevitably means a reduction of the workforce worldwide," chief executive Ulrich Schumacher said in a statement.

"But the dramatic developments in the market and our business situation leave us no choice."

Investor cheer

News of cost-cutting cheered the German markets.

Shares in Infineon opened up by more than 1% on Thursday.

Two weeks ago, the firm raised 1.5bn euros in an issue of new shares.