Avago cuts 230 jobs

By Suzanne Deffree, News Editor -- Electronic News, 5/18/2007

Analog interface components supplier Avago Technologies has announced a 230 employee layoff among its Singapore workforce, as it further expands its manufacturing outsourcing program.

“In January 2007, we announced a strategic shift in our business model to increase customer competitiveness in our four core markets by focusing existing resources on higher value-added activities such as new product introduction, research and development, marketing and supply chain management,” said Hock E. Tan, president and CEO of Avago, in a statement this morning. “This strategy has increased the flexibility in our cost structure and enabled us to better deal with the cyclical trends that impact our industry.”

Avago is the spun out chip business of Agilent Technologies Inc. and primarily serves the industrial and automotive, wired infrastructure, wireless communications and computer peripherals end markets. The company was incorporated in Singapore in December 2005, and at the time split its headquarters between there and San Jose. Since then, Avago has seen a number of changes, including the sale of its printer semiconductor business to Marvell for $240 million in early 2006 and the sale of its image sensor business in a $53 million deal to Micron in December 2006.

The company said it expects to record a cash charge of approximately $4 million in its third fiscal quarter, ending July 31, but did not release what types of positions the move would affect and by when the cuts would be made.

While the layoffs are significant considering the company employs about 1,000 analog engineers, they pale in comparison to separate company layoffs earlier in the quarter. IBM, for one, slashed some 1,315 services-related jobs along with an unknown number of contract positions earlier in May and Lenovo, which coincidently bought IBM’s PC line in 2004, in April announced some 1,400 job cuts in an effort to streamline its supply chain and save $100 million in its current fiscal year.