Broadcom Leaving Exit Cellular Baseband Industry – 2500 Layoffs Coming

Posted by at 2:03 pm on July 23, 2014

After lackluster quarterly financial results, chip developer Broadcom is looking to exit the cellular baseband manufacture business. As a result of the business shift, the company is looking to lay off 20 percent of its workforce.

Approximately 2,500 employees will be affected by the layoffs, according to the company’s latest US Securities and Exchange Commission (SEC) filing. While the losses for the quarter are only $1 million, the previous quarter showed $165 million in profit.

Broadcom chips are widely used across the industry, but have a long development cycle and only a short period of time where the chipset is considered viable based on speed considerations. If the company does exit cell baseband chip manufacture, it will take a $417 million restructuring charge with $150 million being in this quarter, which almost certainly guarantees another quarterly loss for the company.

Most of the employees headed for the unemployment line are involved in baseband chip manufacture. Another 250 will be purged from administrative positions, such as sales, human resources, and other administrative positions. An undisclosed number of contractors will also be looking for work.

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