Big job cuts at Broadcom Ltd. following its $37 billion sale in February to Singapore-based Avago Technologies Inc. and a string of divestitures fueled one of the steepest local employment drops in the chip sector in years.
The 17 biggest chipmakers here shed 756 Orange County-based positions in the 12 months through July, decreasing local employment to 3,984, based on this week’s Business Journal list. The 15.9% drop—believed to be the largest dip ever here—reversed a moderate increase in employment in the 12 months through October, the last time the tally was taken.
Four companies added workers, and three were down. One company reported flat employment, while nine were either Business Journal estimates or didn’t provide enough information for a year-over-year comparison.
The top four employers maintained their previous rankings.
Perennial No. 1, Broadcom, which designated its San Jose operation as its U.S. headquarters after the sale, didn’t respond to employment inquiries.
The company has an estimated 1,650 local workers, which likely is a higher figure than actual headcount. The Business Journal has reported that Broadcom has slashed at least 750 local jobs since February, based on filings with the California Employment Development Department and knowledgeable industry sources.
The company sold its wireless infrastructure backhaul business in May for $80 million to Carlsbad-based MaxLinear Inc., which moved down one spot on the list to No. 7 with 119 local workers. The business unit employed about 120 over the year and posted sales of nearly $30 million.
The divestiture was Broadcom’s second in less than two weeks. In late April it sold its Internet of Things business for $550 million to Cypress Semiconductor Corp. in San Jose. The cash buy includes Broadcom’s Wi-Fi, Bluetooth and Zigbee IoT product lines and intellectual property, plus its WICED Smart chipsets, which allow devices to talk to each other.
The IoT business and WICED brand, which have been around for a few years, were based at the company’s University Research Park campus and employed about 430 worldwide.
Broadcom’s Irvine operation has lost about a third of its work force and is exploring the sale of one or more of the four midrise buildings under construction at its new office campus at the Great Park Neighborhoods development site.
• No. 2, Towerjazz, added 60 employees, taking it up to 785 workers at its Newport Beach plant, an 8.3% increase.
• No. 3, Woburn, Mass.-based Skyworks Solutions Inc., added 23 employees, up 7.5% to 330.
The company attributed the growth to “capitalizing on the increasing demand for connectivity across the Internet of Things and complexity within smartphones.”
Skyworks in May acquired Irvine-based RFaxis Inc., which was ranked No. 16 on last year’s list with an estimated 39 employees.
Chief Executive Liam Griffin runs the Apple supplier from its Irvine office, which is home to a team of engineers and support staff who specialize in designing communications platforms.
• No. 4, Aliso Viejo-based Microsemi Corp., cut 51 positions, bringing it down to 242 local workers, a 17.4% drop.
The company unloaded some unwanted business units over the rankings period that were gained in its $2.5 billion January buy of PMC-Sierra Inc. It acquired the Sunnyvale-based chipmaker, which specializes in chips geared for server applications and the world’s biggest big-data aggregators, after a two-month bidding war against Skyworks.
Microsemi in May sold assets and certain liabilities related to its Broadband Wireless Division to MaxLinear for $21 million. The sale included RF transceivers and synthesizers for 3G, 4G, and future 5G cellular base stations and remote radio head systems.
The sale was its second divestiture in a little over a month. It offloaded a secondary business line of embedded security, RF, microwave and custom microelectronics in late March for $300 million to Massachusetts-based Mercury Systems Inc., shedding about 275 employees in Camarillo, San Jose, Phoenix, and West Lafayette, Ind.
Chipmakers on the list added 10,796 employees companywide in contrast to local cuts, nearly the same figure as the previous list year, ending the period with 227,222.
The developments come as chip sales are projected to fall to $327 billion this year, down 2.4% from last year, according to Washington, D.C.-based market researcher World Semiconductor Trade Statistics.
Estimated growth of 1.8% in optoelectronics, 7.6% in sensors, and 1% in analog circuits is forecasted to be offset by declines in memory, which is projected to drop 10.2%, and in logic, down 2.5%.
The Americas region is projected to experience the largest declines as consolidation likely will be a key storyline throughout the year.
