Broadcom winds down cellular baseband business at expense of 2,500 jobs

Broadcom winds down cellular baseband business at expense of 2,500 jobs

23 JUL 2014

Semiconductor firm Broadcom has given up on finding a buyer for its cellular baseband business, preferring instead to wind the unit down and cut losses.

CEO Scott McGregor, during Broadcom’s second-quarter results conference call with analysts, said the decision “enables us to focus on our core strengths that much more quickly”.

Broadcom also announced it had cut 250 sales and administrative jobs and that the worldwide headcount would be reduced by another 2,250 employees. The company had around 12,500 employees at the end of 2013.

McGregor said last month that the cellular baseband unit would either be sold or wound down, and that he wouldn’t wait long to take the latter option if no buyer could be found.

Aside from concerns about the fiercely-competitive low- and mid-end markets for baseband chips, McGregor said he was also worried about how stable the high-end smartphone market for baseband chips might be.

Broadcom splits its business into three groups – broadband communications, mobile & wireless, and infrastructure and networking.

Within mobile & wireless are connectivity solutions and baseband. But while Broadcom has done well in connectivity – more than a 33 per cent market share according to some estimates – it only has a 3 per cent slice of the mobile baseband and application processor market.

Broadcom reported Q2 sales of $2.04 billion, down 2.3 per cent year-on-year. It said Q3 revenues would be between $2.10 billion and $2.25 billion. Broadcom lost $1 million in Q2, compared with a loss of $251 million last year.

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Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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