Broadcom is initiating widespread layoffs from its LTE and modem design teams both in the U.S. and overseas, according to sources familiar with the situation. The move comes just days after the company closed a $164 million deal to acquire the LTE-related assets of Japan-based Renesas Electronics.
The layoffs, which began last week and are expected to continue on through this week and potentially longer, will hit at least several hundred IT workers, sources say. More than likely, they’ll get deeper over the next 12 months, since the company has said it expects to slash roughly $45 million in operating expenses as a result of the Renesas transaction.
Last week, Broadcom handed out an undetermined number of pink slips to its LTE and modem design operations in San Diego, as well as in New Jersey, Colorado and India, sources say. The New Jersey layoffs affected approximately 30 people, or about a third of the team there. Roughly 220 people – about half of the local team — were given layoff notices in India.
This week, members of Broadcom’s Sunnyvale, Calif., LTE and modem design teams, which combined have upwards of 90 people, will reportedly receive layoff notices. They’re expected to receive packages that include at least two months of severance. Under the federal WARN Act, companies are required to give workers 60 days of notice when large layoffs are planned.
Broadcom declined to comment because it’s in a pre-earnings quiet period, a company spokeswoman said.
Broadcom employees say the layoffs come as no surprise, given that the company acquired LTE assets and nearly 2,000 engineers with the Renesas agreement, which was announced in early September and closed October 1.
In September, Deutsche Bank Analyst Ross Seymore said in a research note that the deal would help the company “to accelerate availability of its first multimode, carrier-validated LTE SoC platform into early 2014 from prior expectations of (the second half of 2014).” After the announcement, EE Times noted that Broadcom had been working on LTE for several years but didn’t appear close to shipping a product on its own.
Although the layoffs weren’t necessarily a surprise, no one likes to lose their job. That said, some workers are already fielding offers for contracting jobs that pay at a higher rate than their Broadcom positions did, our sources say. Of course, not everyone is landing such offers.
Broadcom may have more to say about the layoffs when it holds its third quarter earnings announcement on October 22.
BY DAWN KAWAMOTO | Dice
Commented by colordev:
TFA says “This is the original Nokia modem team, it started work on LTE, a better part of a decade ago. These are some of the guys who created the LTE standard and were involved in the original algorithm work of LTE long before other companies were developing LTE, so we believe we found some really good talent here.”
Most of those ex-Nokia, ex-Renesas people are located in city of Oulu in Finland, and a few months ago all of them almost went unemployed because Renesas run out of money; right when this new modem tool was ready for the markets. And miraculously their jobs were saved by the bell… by the Broadcom’s offer.
Broadcom now laying off its people is just an aftershock to Nokia’s and Renesas’ failures to utilize their former talent pools properly. These kind’s of event, once again, hi-light the fact that Nokia was once doing all kinds of right gizmos. But unfortunately its leadership has been failing the company for a full decade now. In fact, those who have been leading Nokia during the last decade should never hired for any non-gargoyle jobs. The kind of waste of human creativity and stockholders’ property they caused is just sad.
Commented by YoopDaDum:
No, they will keep the Renesas team I believe as they need them. And the people they’re laying off were recently (3 years ago, around October 2010) acquired. In short, historically Broadcom had its own 2G and 3G with associated engineers. When they looked at LTE, instead of developing the technology in-house they acquired a start-up called Beceem. Beceem was doing WiMAX successfully, and as everyone doing WiMAX were in the process of switching to LTE and had started announcing they were on it.
Three years later and Broadcom had no working LTE. Even Intel, who started announcing its first LTE chip in 2011, is starting to show hardware 2 years later. It’s likely Broadcom management is not happy at all about the situation, and in the end what’s happening here is that they’re sacking the Beceem team to replace it with the Renesas LTE team. As they make a point of saying they only acquired the LTE assets of Renesas, they may keep the historical Broadcom 2G/3G people. I’m only guessing from public info here, YMMV.
Now I’m NOT laying the blame on the Beceem guys here. Integration in a bigger company can be complicated, with lots of turf wars. It’s very possible that the in-house Broadcom 2G/3G team had their own in-house plans to develop LTE (skunk-work style maybe) and didn’t see the Broadcom acquisition in a good light. As LTE needs to be integrated with 2G/3G you need some good cooperation between the teams. It’s also possible that some key Beceem guys were not happy and left, leaving the rest in trouble. They could have over promised too. What I mean is that there are many ways to fail in such an acquisition, I don’t know what happens and can’t and won’t lay the blame on anyone. I’m just trying to clarify the situation a bit on what happened.
Now the fact that it is said that only Renesas LTE is interesting. Renesas had a full 2G/3G/LTE system as far as I know. Are they cutting the 2G/3G out to keep their own to please the internal guys? How easy/fast such surgery will be? We’re not at the end of the story…
Now I see why some my ex-colleagues who worked in Broadcom Taiwan had a business trip to Oulu recently. Moreover this matter really reminds me of what Altair Semiconductor co-founder said three years ago.