Fabless chip vendor Broadcom Corp. said Tuesday (Oct. 22) it would reduce its workforce by up to 1,150 employees as part of a restructuring plan to reduce expenses.
The layoffs—which had been rumored for the past week—were announced as the company reported better-than-expected results for the third quarter. Some of the job cuts will effect employees who joined the company as part of the recent acquisition of Renesas Electronics' LTE assets, which closed earlier this month, Broadcom said.
Broadcom (Irvine, Calif.) reported third quarter sales of $2.15 billion, up 3 percent from the second quarter and up one percent compared with the third quarter of 2012. The company reported net income for the quarter of $316 million, or 55 cents per share, up from a net loss of $251 million in the previous quarter and a net income of $220 million in the year-ago quarter.
In connection with the layoffs, Broadcom said it recorded restructuring costs of $12 million in the third quarter and expects to record another $20 million in restructuring costs in the fourth quarter.
On Oct. 1, Broadcom completed its $164 million acquisition of Renesas's LTE-related assets, a move the firm believes will allow it to penetrate the LTE market early next year.
"With the Renesas transaction closed, the combined team is working diligently to deliver LTE revenue in early 2014," said Scott McGregor, Broadcom's president and CEO, in a statement issued Tuesday. McGregor added that Broadcom is taking "necessary steps to tightly manage the business while focusing on strategic initiatives, including LTE, data center innovation and driving the next generation of home video with HEVC."
On a pro forma basis, excluding charges, Broadcom posted a third quarter net income of $460 million, or 76 cents per diluted share, up 6 percent from the previous quarter but down 3 percent from the year-ago quarter.