ST-Ericsson joint venture begins dissolution process, 1,600 jobs gone in the process

Darren Murph
D. Murph|03.18.13

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ST-Ericsson joint venture begins dissolution process, 1,600 jobs gone in the process

It's typically a bad sign when a major semiconductor company sees its CEO walk away, and no one in adjoining offices stops to do anything about it. Such is the case with ST-Ericsson, a (now) failed joint venture of STMicroelectronics and Ericsson. The two outfits have seemingly failed to find a suitor for the JV, leaving them with relatively few options -- poor ones at that. In a release posted today (and embedded after the break), the entity has stated that each partner company will take on some of the business, but around 1,600 jobs will be lost from the sectors that neither has interest in. ST-Ericsson was an attempt to jump-start a semiconductor business in Europe, but it actually hasn't turned a profit since forming in 2008.

Ericsson will take on the design, development and sales of the LTE multimode thin modem products, including 2G, 3G and 4G multimode, while ST will take on the existing ST-Ericsson products, other than LTE multimode thin modems, and related business as well as certain assembly and test facilities. It's expected that the particulars will clear regulatory hurdles in Q3 of this year, and in order to make sure things go as well as they can in the interim, Carlo Ferro is being appointed president and CEO of the JV starting on April 1st.

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ST-Ericsson announces global workforce review

March 18, 2013

Geneva, March 18, 2013 – ST-Ericsson, a joint venture (JV) of STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC), today announced a plan for a global workforce review, following the announcement made today by Ericsson and STMicroelectronics about the future of the joint venture.

The proposed key steps of agreement between the parent companies include each parent taking on parts of ST-Ericsson. It is proposed that Ericsson will assume approximately 1,800 employees and contractors, with the largest concentrations in Sweden, Germany, India and China. It is also proposed that ST will assume approximately 950 employees, primarily in France and in Italy, to support ongoing business and new products development within ST.

In addition, ST-Ericsson is pursuing external options for the future of the connectivity business, which employs around 200 employees worldwide.

In connection with the transfer of the majority of its workforce to the parent companies, ST-Ericsson will carry out restructuring of its current operations which could impact some 1,600 employees worldwide, out of which in a range of 500-700 are in Europe, including 400 to 600 positions in Sweden and 50 to 80 positions in Germany.

ST-Ericsson – with the support of both parent companies – will honor all obligations to employees, including those related to restructuring.

The proposed changes are subject to negotiations with work councils and employee representatives as required.
About ST-Ericsson

ST-Ericsson is a world leader in developing and delivering a complete portfolio of innovative mobile platforms and cutting-edge wireless semiconductor solutions across the broad spectrum of mobile technologies. ST-Ericsson was established as a 50/50 joint venture by STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC) in February 2009, with headquarters in Geneva, Switzerland.

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