ST-Ericsson Does the Splits
GENEVA -- ST-Ericsson, a joint venture of STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC), today announced the completion of the restructuring activities and the transfer of business, assets and employees to Ericsson, STMicroelectronics and third party buyers, following the decision announced on March 18th, 2013 to split up the company and to wind-down the joint venture.
On August 2nd 2013, ST-Ericsson transferred approximately 1,800 employees and contractors to Ericsson- with the largest concentration in Sweden, Germany, India and China - working in design, development and sales of the LTE multimode thin modem products, including 2G, 3G and 4G interoperability. On the same date, ST-Ericsson also transferred approximately 1,000 employees to ST, primarily in France and in Italy, adding competences in embedded processing, RF, analog and power technologies, software and system integration to fuel growth of the existing ST businesses.
In addition, during the past days ST-Ericsson has successfully closed transactions with third parties, including the sale of its Global Navigation Satellite System (GNSS) assets, the transfers of a Linux software team based in Lund, Sweden, and of a Wireless LAN team based in Noida, India, securing a new employer for a further approximately 200 employees.
ST-Ericsson has completed all required employee-related procedures in the last four months, securing a timely transition towards the winding down of the joint venture as requested by the two shareholders. The restructuring is impacting about 1,100 employees worldwide, out of which about 300 employees are in Europe.
Business continuity and support for customers going forward is fully ensured by Ericsson for the LTE multimode thin modem products and by STMicroelectronics for all other products excluding the GNSS connectivity products transferred to the buyer.
Carlo Ferro, President and Chief Executive Officer of ST-Ericsson appointed on April 1st 2013 to lead the transition phase, said: "Over 3,000 ST-Ericsson's employees have now found new homes with leading players of the industry, where they will contribute with their outstanding competences. The transition has been completed executing on time and with lower costs than anticipated, while minimizing the social impact and with the full support of all employees. I would like to thank the employees and the employee representatives for their understanding and cooperation. We have dealt with this difficult transition in a manner that is both responsible to people and accountable to shareholders, as we believe this is the viable path for a large company transformation."