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Broadcom to cut 1,150 jobs in restructuring
- — 23 October, 2013 20:29
Communications chip maker Broadcom is cutting approximately 1,150 jobs, nearly one-tenth of its workforce, as part of a global restructuring.
The company announced the cuts Tuesday as it reported third-quarter revenue that was nearly flat from last year's third quarter, at US$2.15 billion. That was up just 0.8 percent from $2.13 billion a year earlier. The company also posted net income of $316 million, compared with a loss of $251 million in last year's third quarter.
Broadcom said the restructuring, which its board approved on Sept. 25, is aimed at cutting costs as well as better focusing the company's spending on key initiatives. The cost-cutting also includes lease terminations, the company said.
The layoffs will include about 350 employees that Broadcom took on through its acquisition of LTE chip technology from Renesas Electronics, which was completed on Oct. 1. As many as 425 Broadcom workers will also be cut because their jobs became redundant after Renesas was absorbed into the company. But the layoffs will also include up to 375 employees to be cut from across all of Broadcom's regions and business functions, according to a U.S. Securities and Exchange Commission filing by the company. That resulted from a regular review of the company's resource allocation, President and CEO Scott McGregor said on a conference call following the financial report.
Also on the call, McGregor said the company expected short-term challenges including softness in its wireless connectivity and broadband access businesses.
Broadcom makes silicon for both wired and wireless communications, including smartphone and tablet chips as well as parts for set-top boxes, enterprise and carrier infrastructure, and other systems. It has approximately 11,750 employees.
In early September, the company announced it would pay an estimated $162 million for LTE assets from Renesas that it would ship starting early next year. Among other things, the deal will allow Broadcom to ship its first multiband, carrier-validated LTE system-on-a-chip product for mobile devices. It also acquired intellectual property for emerging LTE technologies including VoLTE (voice over LTE) and carrier aggregation, which lets operators combine spectrum bands to boost capacity.