SAN FRANCISCO: Broadcom said it is winding down its money-losing cellular baseband chip business and cutting one-fifth of its total workforce, instead of selling the unit.Chief executive Scott McGregor told analysts on a conference call that after Broadcom said in early June it would exit baseband and then tested the market for a possible sale, the company decided to shut it down.
Broadcom in its annual report said that it has cut 250 sales and administrative jobs and expects to reduce worldwide headcount by another 2,250 employees. Those jobs are equivalent to about 20% of the 12,550 employees. Earlier this week, Broadcom reported stronger-than-expected adjusted second-quarter earnings and gave a third-quarter gross margin forecast that pushed the chipmaker’s stock higher.
Broadcom’s connectivity chips are used widely in smartphones including Apple’s iPhones. But the company lost market share in baseband chips and made slow progress in leading-edge 4G technology, which is dominated by Qualcomm.