2500 is a very big number, so much amount of trained and qualified technical persons getting laid-off. Broadcom is doing good in wireless and Ethernet business market, may be they would have used this qualified manpower in this area instead of laying them off. There are many unattended markets are still there on the entire globe. Like 4G deployment by Reliance in India.
I definitely recall reading that in transitioning to an unlimited vacation policy, your accrued rollover from last year is paid out as cash (income) or can be put into your 401K exempt from the annual limit.
(Actually, expiring vacation rollover from the year before as well as last year could be diverted to your 401K exempt from the annual limit. The problem is that a lot of companies know about it but don't implement it!)
The advantage of unlimited vacation for employers is that there is not rollover to track, and no payout liability if the employee leaves.
I got a couple Wall Street reports in my inbox following the B'com news. Neither one mentions the layoffs and both are positive. Wall Street tends to reward CEOs who cut people and costs.
Here's a snippet from one report. It's by Ross Seymore of Deutsche Bank Equity Research:
"Looking forward, we expect the company's core business to grow faster than the semi industry, its connectivity business to be more resilient than feared, and its margins/cash flow to increase with capital returns to investors rising. We therefore reiterate our Buy and tweak our P/T up to $47."
Late last night I got an email in from Will Strauss of market watcher Forward Concepts in Tempe, Ariz. with this perspective:
"Unfortunately, Broadcom found that there are no big LTE modem sockets to be had since Apple (via Qualcomm) and Samsung (with its own LTE modem now...based on CEVA) have most of the smartphone market. All the other LTE modem sockets (mostly 3rd-world smartphones) are being filled with Marvell, Spreadtrum, Nvidia, Intel, ZTE, Huawei (and soon, MediaTek) LTE modems.
"The volumes of those non-Qualcomm and non-Samsung sockets are small, but hey, you have to start somewhere even its in emerging BRIC countries. The lesson is that those new LTE modem vendors will have to look for 3rd-world sockets that are moving from 3G to 4G. For example, Nvidia is in LTE smartphone sockets in France and South America...something that we don't see from a U.S. standpoint.
"MediaTek is the exception since it's nicely tied into the China cellphone market already. When it finally ships its LTE modem (they claim to be in devices by the end of this year), they will get a big jump over everyone else in China (slugging it out with Qualcomm who knows MediaTek is coming and QCOM is dropping its low-end LTE chips by 10%.
"In reality, Broadcom simply couldn't afford the 1,000+ engineers they had working on a cellular modem business slice that was too small to support them."
Horrible as this is for the 2,500 people involved I am giving B'com execs some credit for taking fast action after seeing the baseband biz was sucking profits and endangering the company.
That said I'd like to get more insight into the history here. How did B'com go in--what 18 months?-- from buying into the Renesas baseband biz, racing toward an LTE chip, then cutting the biz and 2,500 people?
For one thing, they won't be paid out their vacation. Broadcom changed the vacation policy from an accrued entitlement appearing on one's paycheck to "you have as much as you want, just ask your boss" (which in general turns out to be a bad deal).
Cutting 2,500 jobs that's a very big number. HOpe the employees were given assistance in placement elsewhere and sufficient time was also given. Layoffs affects a person socially and emotionally. Management should avoid it to the extent possible.
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