After Avago merger, Broadcom to axe 1,900 jobs worldwide
AppleInsider Staff
Apple supplier Broadcom Ltd., n´ee Broadcom, has plans to cut 1,900 jobs globally in a restructuring effort that comes one year after the chipmaker was acquired by competitor Avago for $37 billion.
As reported by Reuters, the company said it expects to shoulder some $650 million in charges through 2018 as a direct result of the workforce winnowing process.
Avago announced intent to purchase Broadcom for $37 billion last May with plans to pay out $17 billion in cash and 140 million Avago shares worth $20 billion. The deal was completed on Feb 1.
For the three-month period ending in January, Broadcom beat analyst estimates with adjusted revenues of $1.78 billion, today's report said. The better-than-expected showing net the company $377 million, down from $429 million notched during the same time last year.
The Avago-Broadcom merger, characterized as the "successor" to Avago Technologies, combined two major chipmaking businesses into a single operating entity. Broadcom supplies wireless communication components and other hardware technologies to a variety of tech industry players. Apple, for example, uses Broadcom's wireless chipsets across its product lines, the most important being iPhone.
Looking ahead, analysts anticipate increased competition for iPhone parts orders from Intel, Qualcomm and potentially Apple's in-house baseband tech team.
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3 Comments
Mergers typically result in needless duplication of job functions and a need to "trim the fat" after the core business has spent way too much.
Broadcom make some of the best WiFi chip on the market. They are expensive too but I think they are worth the money.
It wasn't until the LSI acquisition i knew of Avago existence. The acquisition actually mean Avago becomes Broadcom, which is strange as you acquire something and becomes part of it rather then vice versa.
I think Apple may be making their own WiFi / Bluetooth Chip rather then a 4G/5G baseband chip. Every single Apple products has WiFi / Bluetooth in it. iPhone, iPad, Mac / Macbook, Apple TV, AirPort, and even the Apple Watch. That is 300M+ unit per year from Apple that includes WiFI and Bluetooth. And the good thing with WiFi and Bluetooth is that they changes only every 3 - 4 years. Compared to baseband, where you need to care about everything from 2G, 3G, LTE, and the constant update of LTE spec as well as VoLTE testing and conformance, the coming up of 4.75/4.9G and 5G.
802.11ac has now been with us for 4+ years if we include the draft period. 802.11ac Wave 2, is arguably not an important update for everyone is only coming in now. The real successor for 802.11ac is 802.11ax, will provides real world transfer speed that is double that of Gigabit Ethernet and a Theoretical speed per devices of up to 10Gbps. But that is only coming in 2017 at the earliest, and realistically 2018/2019.
All in all, I don't see there is much room left for Broadcom in Apple's roadmap.