Chief Executive Hock Tan cleared out nearly the entire management team at Broadcom Corp. following last week’s close of Avago Technologies Ltd.’s $37 billion buy of the Irvine-based chipmaker.
Tan has been lauded on Wall Street for trimming acquired companies and unloading noncore business lines in an ongoing roll-up strategy. He visited Broadcom’s sprawling campus on California Avenue at University Research Park last week to meet with cofounder Henry Samueli and other employees who survived the round of cuts.
The newly combined company will go forward as Broadcom Ltd. Other changes include a new logo that resembles a heartbeat encircled in red, and the removal of the security gate at the Irvine facility, which has yielded status as the company’s headquarters to San Jose, where Tan is said to spend most of his time.
Samueli will retain his post as chief technology officer and maintain a board seat at the combined company. He exercised options worth more than $1 billion and sold 653,505 shares of common and restricted stock valued at $35.6 million after the close of the deal, according to regulatory documents filed with the Securities & Exchange Commission.
At least eight top executives appear to have lost their jobs—they’re listed as “former” employees in regulatory filings.
Broadcom declined to comment on this story.
The list includes Eric Brandt, executive vice president and chief financial officer; Rajiv Ramaswami, executive vice president and general manager of Broadcom’s Infrastructure & Networking Group; Daniel Marotta, executive vice president and general manager of the Broadband and Connectivity Group; Neil Kim, executive vice president of operations and central engineering; Cindy Fiorillo, senior vice president of finance and corporate controller; and Arthur Chong, executive vice president, general counsel and secretary.
Michael Hurlston, a former executive vice president of worldwide sales, now serves as senior vice president and general manager of Broadcom’s Wireless Communications and Connectivity Division.
The executives were listed in separate filings related to recent stock sales. Each cashed out handsomely after Broadcom’s sale.
Ramaswami disposed of 333,235 common shares, valued at roughly $18.1 million. Marotta sold 402,450 shares for $21.9 million; Kim sold 264,483 common shares for $14.4 million and exercised stock options worth more than $3.8 million; Fiorillo disposed of 77,114 shares for $4.2 million; Chong sold 284,252 shares valued at $15.4 million; Brandt unloaded 491,364 shares at $26.7 million; and Hurlston sold 276,361 of common shares valued at $15 million and exercised stock options worth some $592,000.
The company had already announced that Broadcom Chief Executive Scott McGregor would leave the company after the transaction. He was given a $67 million severance package, unloaded 1.8 million shares of common stock on Feb. 1 valued at $100 million, and exercised stock options that topped $22.8 million, according to regulatory filings.
Separate filings indicate the following directors no longer hold board seats:
Robert Switz, who sold 39,038 shares worth $2.1 million at the close of the deal; William Morrow, who sold 12,863 shares valued at $701,000; John Major, who sold $1.6 million in stock and exercised options worth about $740,000; Maria Klawe, who sold 41,373 shares for $2.2 million; and Nancy Handel, who sold $3 million worth of shares and exercised options worth $412,500.
Eddy Hartenstein, who cashed out $4.1 million in stock, was the only director besides Samueli to keep his board seat. Hartenstein, who has served on Broadcom’s board since June 2008, is the former publisher of the Los Angeles Times and chief executive of the Tribune Co. who oversaw the newspaper operator’s restructuring through its Chapter 11 bankruptcy.
Broadcom’s new management team includes a number of Avago veterans who will retain their responsibilities in the newly combined company. Among them are: Anthony Maslowski, senior vice president and chief financial officer; Bryan Ingram, senior vice president and general manager of the Wireless Semiconductor Division; Charlie Kawwas, senior vice president and chief sales officer; and Patricia McCall, vice president and general counsel.
The layoffs appear to extend far beyond the management ranks to hit several departments, including administration, human resources, legal and marketing, according to several sources with knowledge of recent moves.
Avago indicated staff reductions would occur throughout its operations over an 18-month period following the sale and eventually lead to annual savings of at least $750 million.
“Some of it will come very quickly—some of it will come at the end of those 18 months,” Maslowski said when the deal was announced in May.
It’s unclear how deep the cuts have been in Irvine or whether more cuts are in store there.
Broadcom entered 2016 as OC’s 34th largest employer, with 2,400 local workers, according to Business Journal research. The company specializes in communication chips—which power Bluetooth, Wi-Fi, near-field communication and RF radio applications in some of the world’s most popular electronics made by the likes of Apple, Samsung and HTC. It also has strong business lines in broadband, set-top boxes, and data center and networking connectivity.
The combined company will have revenue of about $15 billion, placing it behind No. 1-ranked, Santa Clara-based Intel Corp. and No. 2, Qualcomm Corp. in San Diego, as one of the world’s largest chipmakers.
Broadcom has yet to file a layoff report with the California Economic Development Department, a requirement that mandates employers give a 60-day notice to affected employees and state and local agencies prior to “a plant closing or mass layoff.” That could come as early as this week.
The Business Journal first reported in November that widespread job cuts were imminent at Broadcom’s Irvine headquarters and elsewhere.
The company for months indicated that plans for a new five-building campus next to Orange County Great Park would not be altered with the sale, but construction on the first phase on the 73-acre development site seems smaller than originally advertised.
There appears to be little if any work done on the fourth core office building, as well as a fifth, smaller low-rise building planned near the entrance of the campus just off Alton Parkway.
