Broadcom to cut 2,500 jobs

With no buyer in sight for its cellular baseband unit, Broadcom (BRCM) has decided to wind down the business and lay off 2,500 people. The company made the announcement during its third quarter earnings call yesterday, noting that 250 sales and administrative employees have already been let go.
Broadcom announced its plans to exit the baseband business early this summer, hiring J.P. Morgan to look for a buyer. The chipmaker has about 5% of the cellular baseband market, which is dominated by its California neighbor Qualcomm, and increasingly by Taiwan’s MediaTek.
Last fall, Broadcom bought Renesas’s LTE modem business for $164 million, with plans to produce a competitive multimode, carrier-validated LTE system-on-chip. About a month later, Broadcom said it would lay off 1,150 people as it absorbed that business. Some of the people who lost their jobs at that time had come from Renesas.
By the end of 2013, Broadcom had 12,550 employees, according to its annual report. The layoffs announced yesterday will bring the headcount down to around 10,000.
The Broadcom layoffs could send a stream of resumes in Qualcomm’s direction, especially since both companies are headquartered in Southern California. Qualcomm is currently hiring wireless modem hardware engineers in San Diego and Santa Clara, and in Irvine, where Broadcom is headquartered.
Broadcom says that exiting the LTE modem business will enable the company to focus on areas of strength, which include connectivity chipsets for mobile devices, Wi-Fi access points and small cells. The company is poised to benefit from demand for in-building connectivity solutions, and says its solutions have already been deployed in two million small cells.
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