ST-Ericsson: Loss making mobile chip venture to be split, 1600 jobs to go


The loss making join venture between STMicroelectronics and Ericsson will be split and parts of the business will be absorbed between the two companies while the rest will be closed according to a report by Reuters. The move will result in the loss of 1600 jobs. The future of ST-Ericsson has been in question since one of their top customers, Nokia, dropped support for Symbian and shifted to Windows Phone resulting in a change in the choice of chipset. Under the plan, Ericsson will keep around 1,800 employees of ST-Ericsson’s total workforce of 4,450 total in addition to a product line of 4G multimode modems. The jobs will mostly be in Sweden, Germany, India and China. STMicro will retain some of the other existing products as well as assembly, test facilities. Additionally, factories will not be closed. While Ericsson has already made provisions in 2012 to the tune of $516 million to accomodate for the move, STMicro expects $350-450 million in cash costs from the restructuring. Shifting the products in-house might have a positive effect on STMicro’s revenues according to Max Kamir, broker at Louis Capital Markets. Ericsson on the other hand plans to make the 4G multimode chipset a top three global player in the future.

[Via – Reuters]

Author: Dhruv Bhutani

Your friendly neighborhood techie. Currently using a Pixel 2 XL. Catch him on Twitter (@DhruvBhutani) / Facebook .