UPDATE 3-Infineon's new CEO sets pace with major job cuts

(recasts, adds CEO comment, updates share price)

By Nicola Leske

FRANKFURT, July 25 (Reuters) - Peter Bauer made his mark as Infineon's (IFXGn.DE) new chief executive on Friday by announcing plans to cut staff by 10 percent in a move to lower costs and increase efficiency at the loss-making chipmaker.

"At the end of the day, our operating margin is too low to cover our (12 percent) cost of capital," said Bauer, who took the helm of Europe's second-largest semiconductor group in June.

Faced with an industry slump that shows scant sign of easing, Bauer will cut 3,000 jobs -- two-thirds of them in Germany -- over the next year to help trim costs by at least 200 million euros a year.

The plans angered labour representatives who grumbled that employees had to suffer for trouble at the top.

"A never-ending spate of management mistakes has led to the worst crisis in the history of the company, now employees are again left holding the bag," IG Metall union official Werner Neugebauer said.

Infineon's third-quarter earnings got a mixed reception.

Analysts said Infineon's operating profit excluding its memory chip unit Qimonda QI.N of 71 million euros on the back of an asset sale was ahead of expectations but net loss was more than twice as high as expected.