ST-Ericsson splits; 1,600 to face axe; no lay-offs in India

BANGALORE, INDIA: STMicroelectronics and Ericsson have finally parted ways, officially. The news comes after over two months, when STMicroelectronics and Ericsson first announced in December 2012 that their joint venture, ST-Ericsson, will be split.

Ericsson will take over the design, development and sales of the LTE multimode thin modem products, including 2G, 3G and 4G multimode. It will also assume approximately 1,800 employees and contractors, with the largest concentrations in Sweden, Germany, India and China.

On the other hand, 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. The remaining parts of ST-Ericsson will be closed down.

ST will assume approximately 950 employees, primarily in France and in Italy, to support ongoing business and new products development within ST.

ST-Ericsson has in all about 4,500 employees. Once the final transfer is complete, about 1,600 employees globally - 500-700 in Europe, including 400 to 600 positions in Sweden and 50 to 80 positions in Germany - will be laid off. When contacted, an ST-Ericsson India spokesperson said that there will be no lay offs in India and an Ericsson India spokesperson said that this will not affect India.

The formal transfer of the relevant parts of ST-Ericsson to the parent companies is expected to be completed during the third quarter of 2013, subject to regulatory approvals.

Carlo Ferro has been appointed as president and chief executive officer of ST-Ericsson, effective April 1, 2013. Ferro is currently chief operating officer of ST-Ericsson and succeeds Didier Lamouche who, as previously announced, will pursue opportunities outside the company.