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Infineon to cut 3,000 jobs amid heavy quarterly loss

German semi-conductor group Infineon posted a sharp quarterly loss on Friday and announced the loss of thousands of jobs.

Infineon to cut 3,000 jobs amid heavy quarterly loss
Facing the sack? Photo:dpa

“It will be necessary to reduce headcount by a gross figure of approximately 3,000 employees,” a company statement said. “This figure refers to all sites, functions and levels across the company.”

Two-thirds of the cuts would affect German jobs and outright dismissals were not excluded, new Infineon boss Peter Bauer told a telephone press conference. The cuts were part of a broader programme designed to save the company €200 million ($315 million) per year.

IG Metall union leader Werner Neugebauer attacked the announcement, saying: “Not two days go by in Bavaria without bad news for employment.”

He referred to a recent announcement by Siemens, which is also based in the southern German state, of its plan to eliminate 17,000 posts worldwide. Neugebauer said Infineon had suffered from “an endless string of management errors, and once again it is workers that will bear the consequences.”

Infineon employs a total of 43,000 people, including 13,500 at Qimonda, a loss-making subsidiary that it wants to sell.

Bauer said he wanted to wrap up the job cuts by late September 2009, and that he sought to “cede control of Qimonda by our general assembly next February.”

The German group owns a 77.5 percent stake in Qimonda, which produces memory chips. But Bauer denied rumours that his group was open to a takeover or merger of

its own operations.

In the three months to June, the third quarter of its 2007/2008 fiscal year, Infineon lost 592 million euros, following a loss of €1.37 billion in the previous quarter, the company’s statement said.

The latest loss arose in part from a writedown of €411 million in the value of its stake in Qimonda, which posted late Thursday its own quarterly loss of €592 million.

Infineon said that sales in the quarter had amounted to €1.03 billion, down 2.0 percent from the previous quarter. At the operating level however, Infineon managed to turn in a profit of €71 million, well above analysts’ expectations.

It has already warned that fourth quarter results would be hit by one-off restructuring costs, and investors focused on the operating profit figure, driving Infineon shares up by 2.69 percent to 4.96 euros in midday trading on the Frankfurt stock exchange.

Infineon shares lead gainers on the Dax index of blue-chip stocks, which was 1.48 percent lower overall.

AMAZON

Germany opens ‘anti-competition’ probe into Amazon with tougher law

Germany's competition authority said Tuesday it had opened an inquiry into online retail giant Amazon over potential "anti-competitive practices", using a new law giving regulators more power to rein in big tech companies.

Germany opens 'anti-competition' probe into Amazon with tougher law
An Amazon warehouse in Brandenburg. Photo: picture alliance/dpa/dpa-Zentralbild | Patrick Pleul

Federal Cartel Office head Andreas Mundt said his office is examining whether Amazon has “an almost unchallengeable position of economic power” and whether it “operates across various markets”.

If so, it would be deemed of “paramount significance”, said Mundt, adding that the regulator could “take early action against and prohibit possible anti-competitive practices by Amazon”.

“This could apply to Amazon with its online marketplaces and many other, above all digital offers,” he added.

Under the amendment to Germany’s competition law passed in January, the watchdog said it now has more power to “intervene earlier and more effectively” against big tech companies, rather than simply punishing them for abuses of their dominant market position.

READ ALSO: ‘I want to know origin of my grapes’: Amazon loses fruit and veg ruling in German court

The German reform coincided with new EU draft legislation unveiled in December aimed at curbing the power of the internet behemoths that could shake up the way Silicon Valley can operate in the 27-nation bloc.

The push to tighten legislation comes as big tech companies are facing increasing scrutiny around the globe, including in the United States, where Google and Facebook are facing antitrust suits.

The Amazon probe is only the second time that Germany’s Federal Cartel Office has made use of its new powers, after first employing them to widen the scope of an investigation into Facebook over its integration of virtual reality headsets.

The watchdog already has two traditional abuse control proceedings open against Amazon.

One involves the company’s use of algorithms to influence the pricing of third-party sellers on Amazon Marketplace, while another is probing the extent to which Amazon and major producers such as Apple exclude third parties from
selling brand products.

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