German chip maker Infineon on Wednesday announced a brutal series of cost-cutting measures, including putting some workers on reduced hours, as it unveiled a disappointing set of results.
"Macroeconomic headwinds are getting stronger and we do not see this changing in the near term. We are therefore forecasting a drop in revenue for the 2013 fiscal year," Infineon boss Reinhard Ploss said in a statement.
Cost-cutting measures would include "temporarily switching off underutilised equipment, reducing the temporary workforce and the selective use of short-time work," the firm announced.
In addition, investments for next year would be slashed from 500 million euros ($637 million) to 400 million euros and certain development projects would be shelved.
Infineon also said it planned to freeze hiring to maintain its staff levels at current levels and to postpone certain salary increases.
For its fiscal year 2012-2013, Infineon said it expected a drop in earnings by between roughly five and 10 percent.
Group earnings dropped two percent in the fiscal year 2011-2012 just ended to 3.9 billion euros. Operating profit fell by 42 percent to 432 million euros.
The firm put the poor figures down to "global economic uncertainties caused by high public-sector debt levels in Europe".
The eurozone debt crisis "caused customers to be increasingly cautious in their willingness to spend as the 2012 fiscal year took its course," the company complained.
Despite the poor news, investors appeared buoyed by the announcement of the cost-cutting measures.
Infineon stock was the top gainer on the DAX market of leading German shares, up more than three percent despite the broader market being marginally in the red.