Irvine chipmaker Broadcom Corp. said it has laid off engineers, marketers and other workers companywide, following up on its earlier vow to slash costs in the face of declining sales.
Broadcom spokesman Bill Blanning said the company made the cuts during a few days late last month. Blanning declined to provide specific numbers and said “a small percentage” of workers were affected.
Former Broadcom employees said as many as 300 employees were let go, but other sources close to the company said the number could be lower. As of March 31, Broadcom counted 2,797 employees, including about 800 in Irvine.
Earlier in the second quarter, at least one analyst said he expected Broadcom to lay off 10% of its work force,about 270 people,before the close of the second quarter, which ended Friday.
“We believe that the effects of such actions should start to have a meaningful impact on earnings in the third quarter,” Morgan Stanley Dean Witter & Co. analyst Mark Edelstone wrote in a report.
The layoffs follow a recent promise by Broadcom Chief Executive Henry Nicholas to cut costs as the company grapples with the semiconductor slowdown.
“In response to the numerous acquisitions made in the last two years and the current more challenging economic climate, we are taking steps to streamline our business,” Nicholas said in a June 6 statement. “We are beginning to implement these plans during the (second) quarter. This will result in business unit re-alignment, net staffing reductions, facility consolidations, and other actions that will result in an associated charge to be taken during the second quarter.”
The move comes as several chipmakers also have warned about their pending second quarter results. San Jose-based Xilinx Inc., Camarillo-based Vitesse Semiconductor Corp. and San Diego’s Applied Micro Circuits Corp. issued warnings last week, saying a general industry downturn has hit their businesses hard. After acquiring 14 companies in the past year and a half, Broadcom was due for some pruning, according to Blanning.
“We would have needed to do this anyway,” he said. “And you can be sure that the affected employees received very generous compensation packages.” n
