Broadcom pulling out of cellular baseband business
The mobile market is losing another big player – Broadcom has announced that it will wind down its cellular baseband business. The company previously considered a sale, but settled on shutting down the business, which "minimizes the ongoing losses from the business, and enables us to focus on our core strengths that much more quickly," says CEO Scott McGregor.
Those core strengths lie in set-top boxes and related cable TV hardware, connectivity for the Internet of Things and infrastructure tech. McGregor sees the transition to Ultra HD and H.265 as future avenues of growth for the company.
As part of the transition, Broadcom is expected to cut its employee count by 2,500 in total (around 20% of its workforce) with 250 already laid off. The company reported $23 million restructuring costs last quarter, but the final number will grow to $230 million over the next year.
Q2 saw revenues of $2.04 billion (down 2.3% YoY), $625 million of which came from the Broadband Communications unit (responsible for wired and wireless electronics). The company reported a net loss of $1 million, which includes restructuring costs, inventory write-downs and impairment of long-term assets totaling $187 million.
A couple of years ago Texas Instruments pulled out of the smartphone market (despite claiming otherwise for a while).