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.
The issue with Freescale is that it still thinks its Motorola and it's the late 1980's. Back then the 6805 & 68000 dominated the world making them No.1 globally. Unfortunately this success made everyone at Motorola really arrogant, and they've been that way ever since. Today you have a company with terrible device documentation full or errors, poor software integration or simply a lack of knowledge of 3rd party solutions, microcontroller with a poor mix of peripherals vs memory size (embedded Flash micros), rushed programmes to keep up with innovative competitors (Cortex M4 & M0 devices were rushed into production to combat ST STM32 & NXP LPC1xxx), Badly trained and generally poor quality Field Apps engineers and very poor support channels. Freescale needs to get rid of its 'old school' members and employ fresh blood without all the baggage from the Motorola hey days of the 1980s
@Simon7382, Have you ever thought...the industry is suffering because of commoditization by ARM. If everyone has the same ARM, why should there be 100 silicon vendors? Everything becomes a commodity. Look at Freescale, TI, they are all suffering
Well, many of our once stellar semiconductor companies are either in crisis or being sold. Part of the reason is total lack of leadership and vision from the company's top management. The fate of National Semiconductor is prime example. It was a great and innovative company in its prime but its board made one bad CEO hiring decision after the other after Charley Sporck's retirement. At the end they hired a CEO who was a mediocre bean counter with no knowledge or even interest in the technology, or in excellence, or innovation. Just as GM almost died due to bean counter incompetence and shortsightedness, National Semi also died for similar reasons by having been swallowed by TI.
Correct, Freescale does have a product longevity program that offers stability of supply for a broad range of products for 10 years (minimum) to 15 years, depending on the market segment the product serves. Details about the program are available on Freescale’s web site at http://www.freescale.com/productlongevity.
As Dylan points out, Freescale recently announced the results of an extensive strategic review, which included a realignment around five core product areas: Microcontrollers, Digital Networking, Automotive MCU, Analog & Sensors and RF. R&D resources are being reallocated to these areas. The company also announced the appointment of key individuals to join Freescale in strategic areas such as manufacturing operations and product businesses. All of these efforts allow Freescale to focus in markets where it can grow revenue and accelerate market share gain.
The reason Freescale is slowly going to the dumpster is that a design engineer would be stupid to develop a product with any of their parts. It is expensive and time consuming to develop a new product only to learn that some day soon a bean counter at Freescale says... well these customers are not worth keeping so kill the following parts. Take a page from the competition that promises that none of their parts will ever be discontinued (they keep it too). Funny those companies that follow this motto are swallowing their competition, well the ones worth it.
The fix for the company requires a new CEO and executive team that focus on long-term growth rather than their short-term bonuses.
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