Avago plans 600 more job cuts in outsourcing initiative

By Colleen Taylor, Contributing Editor -- Electronic News, 7/27/2007

More job cuts are on the way at Avago Technologies.

The Singapore-based analog interface components supplier today announced plans to continue its manufacturing outsourcing program by cutting about 600 more jobs in Southeast Asia. In doing so, Avago said it expects to record a cash charge of approximately $6 million to $8 million during its fiscal Q3 ending July 31.

Avago, the spun-out chip business of Agilent Technologies Inc., first announced in January plans for a "strategic shift" in its business model that would include an increase in outsourcing its manufacturing positions away from its headquarters in Singapore to more "developing countries." In April, Avago gave Hewlett-Packard a $236 million, 10-year contract for IT outsourcing that entails HP handling Avago's application, server, network, desktop and print management, as well as IT help desk services. In May, Avago announced that it would cut 230 jobs as a continuation of its outsourcing initiative.

Outsourcing jobs is not the only way that Avago has been streamlining its business of late. In February 2006, Avago sold its printer semiconductor business to Marvell for $240 million and sold its image sensor business in a $53 million deal to Micron in December 2006.