SAN FRANCISCO—Freescale Semiconductor Inc. said Thursday (Oct. 25) it would cut jobs as part of restructuring to focus the company more narrowly on fewer product areas to improve revenue and profitability.
Freescale (Austin, Texas) did not disclose the number of planned job cuts, saying that it expected to take charges of $35 million to $40 million for employee severance.
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Gregg Lowe, Freescale's president and CEO, said in an interview that he expected the jobs cuts to equal less than 5 percent of Freescale's overall headcount, which stands at about 18,000 worldwide. Lowe said the restructuring plan was not a cost-cutting move, but part of his previously disclosed plan to focus the company's resources on markets where Freescale has a chance to be a leader.
As a result of the restructuring, Freescale will discontinue its standalone digital signal processor (DSP) business, Lowe said. Texas Instruments Inc.—Lowe's former employer—has an established lead in DSPs. Although Lowe said Freescale would continue to use and develop DSP technology for its multicore products, he acknowledged that the company had little chance of challenging TI.
"It's a real stretch to say we can be the leader in that area," Lowe said.
Lowe said Freescale would restructure around five product areas—general purpose microcontrollers, digital networking processors, automotive microcontrollers, RF power amplifiers and analog/sensors. To head each product group, Lowe chose three veteran Freescale execs and two recent additions from elsewhere in the industry.