Stockholm: The unprofitable mobile technology venture between Ericsson and STMicroelectronics, ST-Ericsson, said yesterday it would axe 1,600 jobs after splitting the operation. ST-Ericsson said restructuring "could impact some 1,600 employees", out of which 500-700 were in Europe, including 400 to 600 positions in Sweden and 50 to 80 positions in Germany.
Ericsson will book a 500 million kronor (€59.9 million, $77.8 million) restructuring charge in the fourth quarter this year, after announcing an eight billion kronor write-off for ST-Ericsson in the fourth quarter of 2012.
STMicroelectronics expected to incur a $350-$450 million (between 270 million and 347 million euros) cost this year for the split. ST-Ericsson last year had a headcount of 5,000, mostly in Sweden, Germany, India and China.
The Swedish firm will take over 1,800 staff, leaving the Franco-Italian company with a workforce of 950 for remaining activities.
The maker of mobile platforms and semiconductors has never been profitable since being founded in early 2009. In the fourth quarter of last year, it made a net loss of $133 million.
Carlo Ferro will replace Didier Lamouche as chief executive to oversee the unwinding of the venture, the company said.
On the other hand, When SAP changed leadership in 2010, the software maker had just been through its first major job cuts in 38 years, clients were upset with price increases, and analysts considered the firm a takeover target.
There's little chance of a takeover now. SAP's stock has gained 94 per cent since Bill McDermott and Jim Hagemann Snabe took over as co-chief executives. SAP has vaulted past Siemens and Volkswagen to become Germany's most valuable company despite revenue that's 10 per cent of Volkswagen's and one-fifth that of Siemens.
McDermott and Snabe have made key acquisitions in cloud-computing and mobile applications, invested in a database that can analyse mountains of numbers in seconds, and hastened the development of new products. That has helped SAP.