Renesas Electronics, a Japanese chipmaker, plans to reduce its global workforce by less than 5%, or fewer than 1,000 jobs, due to a decline in demand for its semiconductor products.

The company will also cancel planned salary increases for both employees and executives in spring.

As a major supplier of automotive chips to Toyota and Nissan, Renesas aims to strengthen its long-term growth strategy while navigating ongoing market challenges.

Following the announcement, Renesas shares fell by 3% during trading on the Tokyo Stock Exchange on Wednesday.