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STMicro Exits Set-Top Boxes, Eliminates Jobs as Sales Wane

  • Stock jumps as CEO seeks strategic changes to revive profit
  • Chipmaker projects revenue will continue to drop this quarter
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STMicroelectronics NV said it will shut down its set-top-box chip business and eliminate or redeploy 2,000 jobs as Chief Executive Officer Carlo Bozotti seeks to cut losses at the unprofitable unit. Shares of Europe’s biggest semiconductor maker jumped.

The restructuring comes as fourth quarter earnings showed a decline on all key indicators from the previous quarter: Net income dropped to $2 million, the gross margin fell to 33.5 percent and revenue shrank to $1.7 billion. STMicro said Wednesday it expects further declines and forecast first-quarter revenues will decrease by about 3 percent compared to the final quarter of 2015, and the gross margin to be about 33 percent.