ST-Ericsson to split, partners to take most of the business
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ST-Ericsson is to split into two parts, with the partner companies each taking a slice of the seemingly failed venture.
Under the terms of an agreement between the two, Ericsson will assume responsibility for the design, development and sales of LTE multimode thin modem products, including 2G, 3G and 4G multimode.
Meanwhile, ST will take on the existing ST-Ericsson products, other than LTE multimode thin modems, and related business, including some assembly and test facilities. The remaining parts of ST-Ericsson will be shut.
ST's president and ceo Carlo Bozotti, pictured, said: "The agreement made with Ericsson represents a major step forward in reaching our new financial model target and allows us to further strengthen the skillsets of our company. Moreover, it protects and leverages the ongoing ST-Ericsson's business, allowing us to reinforce our relationships with key customers, both of ST and of ST-Ericsson."
ST-Ericsson is now embarking on a global workforce review. Under the deal between the partners, Ericsson will take on some 1800 employees and contractors, while ST will assume around 950 employees. As part of the split, ST-Ericsson will restructure its operations and 1600 employees worldwide are at risk.
