Main image of article Broadcom Begins Layoffs in LTE, Modem Design

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.

No Shocker

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.