Broadcom Cut About 1,100 Jobs After Brocade Deal, May Shed More
(Bloomberg) -- Broadcom Inc., a chipmaker whose acquisitions have reshaped much of the $400 billion semiconductor industry, said it cut about 1,100 jobs following its purchase of Brocade Communications Systems Inc. and may reduce headcount further.
“Management is in the process of further evaluating our resources and business needs and may eliminate additional positions, which would result in additional restructuring costs,” the company said in a regulatory filing. The company took charges of more than $100 million, mainly related to cutting staff, it said.
Chief Executive Officer Hock Tan has built Broadcom into one of the largest companies in the industry by buying rivals. He identifies what he calls franchises -- businesses with a sustainable competitive position -- buys the companies that own those operations, and then spins off or closes the rest.
That strategy has made Broadcom increasingly profitable, while fueling revenue growth. Its gross margin, a key measure of industry performance, is more than 50 percent. That will climb over 65 percent next year, according to analysts’ projections.
Broadcom stock closed up 1.9 percent at $268.46 in New York trading. The stock ended 2009, the year it returned to the public market, at $18.29.
©2018 Bloomberg L.P.