November 21, 2024 /SemiMedia/ — AMS-Osram announced plans to expand its "Rebuilding the Base" cost-cutting initiative, a move that will affect more than 500 employees, primarily in non-production roles. The company said the plan aims to address ongoing market uncertainties, particularly the cyclical slowdown in the automotive sector.

The program has already delivered annual savings of €85 million, exceeding initial expectations. To further optimize its cost structure, AMS-Osram has set an additional annual savings target of €75 million, aiming for a total of €225 million in annual savings by the end of 2026.

Of the company's approximately 20,000 employees worldwide, more than 500 non-production positions will be impacted. Around one-third of these roles will be relocated to "lower-cost" countries or regions, the company said. The transformation is expected to incur one-time costs of approximately €40 million, most of which will be recorded in 2025.

AMS-Osram stressed that the restructuring is essential to improve profitability amid ongoing market volatility. It expects the uncertainty, particularly in the automotive sector, to persist into 2025.

For the fourth quarter of 2024, the company anticipates stable demand in the automotive, industrial, and medical markets, while seasonal weakness is likely to weigh on the consumer segment. Looking ahead to 2025, AMS-Osram expects a weak start in the first quarter due to seasonal and product mix effects, as well as cyclical pressures in the automotive sector. However, the company projects gradual improvement over the course of the year.