& cplSiteName &

Entropic Cuts 6 Percent Amid Growing Pains

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
12/3/2012
50%
50%

Chip vendor Entropic Communications Inc. (Nasdaq: ENTR) has cut 40 employees, or 6 percent of its total, due to growing pains brought on by two recent acquisitions.

The decision was made Nov. 28, as Entropic decided "to rebalance its operations," according to an 8-K filed Monday.

Entropic says the move will result in a pre-tax restructuring charge of $0.9 million in the fourth quarter and full annualized costs of roughly $4.2 million.

Entropic is changing from a Multimedia over Coax Alliance (MoCA) specialist to a broad set-top chipset company that will compete more directly with the likes of Broadcom Corp. (Nasdaq: BRCM), STMicroelectronics NV (NYSE: STM), Sigma Designs Inc. (Nasdaq: SIGM) and, to a degree, and Intel Corp. (Nasdaq: INTC).

Much of that evolution has come through recent acquisitions. Five months ago, Entropic put up $8 million to buy the assets of PLX Technology, a company that specialized in direct broadcast satellite technology and chips. It closed a much larger $65 million acquisition of set-top chipmaker Trident Microsystems about eight months ago. The Trident deal added 365 employees, essentially doubling Entropic's headcount.(See Entropic Buys Satellite Tech, Entropic Sweetens Pot to Win Trident and Entropic Readies Its Run at Broadcom .)

Entropic was not immediately available Monday to say which part of the company was hit hardest by the job cuts.

Entropic is one of the chipmakers that's gunning for the XI3, an IP-only HD client box specified by Comcast Corp. (Nasdaq: CMCSA, CMCSK), which is already using Entropic in its Skype TV product.

Pace plc 's first stab at the XI3 is based on Broadcom silicon. Humax Co. Ltd. has also developed a version of the XI3 that recently passed through the Federal Communications Commission (FCC) . (See Comcast Puts Entropic Inside Its IPTV Client, Comcast Taps Entropic SoC for Skype TV, Meet Comcast's IP-Only Set-Top and Comcast's IP-Only Set-Top Unveiled.)

— Jeff Baumgartner, Site Editor, Light Reading Cable

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:16:34 PM
re: Entropic Cuts 6 Percent Amid Growing Pains


Entropic still isn't being too specific on which areas got trimmed, but they confirmed that it's due mostly to those two recen acquisitions, that they're still evaluating how things are to shake out, and that they believe the moves will keep anticipated margins on track. Here's their follow-up statement:


"Regarding the re-allocation, as part of our integration process from our STB SoC and digital channel stacking switch asset acquisitions, we continue to evaluate our global corporate structure to ensure we have the right resource profile – across the company - to execute on our long-term product roadmap and business objectives. 


"As with any major integration, where the company has doubled in size and market opportunity, we need to stay disciplined and controlled in our execution. As we have done over the past 10-years of our company’s history – we will remain diligent in our approach to fulfilling our product roadmap and integration efforts, and remain fiscally responsible.


"By managing-to-plan, minimizing redundancies and optimizing synergies across the company, we took a deliberate approach to ensure we are still on-track to hit our long-term model for operating margins of 18-20% by Q4 2014."


 


###


 

Featured Video
From The Founder
The world of virtualization is struggling to wrench itself away from the claws of vendor lock-in, which runs counter to everything that NFV stands for.
Flash Poll
Upcoming Live Events
March 20-22, 2018, Denver Marriott Tech Center
March 22, 2018, Denver, Colorado | Denver Marriott Tech Center
March 28, 2018, Kansas City Convention Center
April 4, 2018, The Westin Dallas Downtown, Dallas
April 9, 2018, Las Vegas Convention Center
May 14-16, 2018, Austin Convention Center
May 14, 2018, Brazos Hall, Austin, Texas
September 24-26, 2018, Westin Westminster, Denver
October 9, 2018, The Westin Times Square, New York
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
All Upcoming Live Events
Hot Topics
21st Century Networking? Welcome to the Lock-In
Steve Saunders, Founder, Light Reading, 2/20/2018
How Long Before We Hit Peak MWC?
Iain Morris, News Editor, 2/23/2018
Stakes Run High for Tivo in Comcast Suit
Mari Silbey, Senior Editor, Cable/Video, 2/20/2018
AT&T Reveals Initial 5G Cities
Dan Jones, Mobile Editor, 2/21/2018
Sling TV Soars at Dish's Expense
Alan Breznick, Cable/Video Practice Leader, Light Reading, 2/21/2018
Animals with Phones
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Twitter Feed