After merging with Avago, Broadcom plans to axe 1,900 jobs

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By Larry Banks

Chip maker Broadcom plans to cut 1,900 jobs worldwide in a restructuring plan that comes a year after the firm was bought out by competitor Avago for $37 billion.

According to a report in Reuters, the company says it will bear the brunt of $650 million in charges through 2018 as a result of the reduction in staff.

Avago announced its intent to buy Broadcom in May last year for $37 billion, by way of $17 billion in cash and 140 million Avago shares worth $20 billion, in a deal that was completed on February 1st.

For the three months ending in January this year, Broadcom in fact beat analyst estimates with revenues reaching $1.78 billion, the report said. Those results net the company $377 million, but down from the $429 million achieved in the same time period the previous year.

The Broadcom-Avago merger, which has been coined the “successor” to Avago Technologies, merged two major chipmaking companies into one business. Broadcom supplies mainly wireless communication chips and other hardware to tech industry firms such as Apple, which uses its wireless chips across many of its products, most notably the iPhone.

In future, analysts are expecting increased competition for such smartphone components from the likes of Intel and Qualcomm.

SOURCE: Reuters.

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