Still trying to slim down, chip firm Conexant Systems Inc. (Nasdaq: CNXT) is halting new development of wireless LAN chips and laying off 140.

The news came yesterday as Conexant reported its fourth-quarter earnings, and the change took effect immediately. By late afternoon yesterday, the "wireless products" link had been removed from Conexant's home page. (See Conexant Reports Q4.)

Conexant will continue building wireless LAN technology into products such as DSL gateway chipsets, and the company says it will continue supporting its current wireless customers. But development of any new wireless products is out.

Wireless is just the latest of Conexant's cuts. The company just got done culling 500 employees, and it's stopped working on new network processors, packet-processing chips, and chips for the HomePlug Powerline Alliance 's home-networking standard.

That still leaves Conexant with a broad portfolio including chips for DSL, set-top boxes, video, VOIP, and passive optical networking (PON).

Conexant had about 3,000 employees five weeks ago, before all these cuts, so it's dropped headcount by about 20 percent, to around 2,360.

Conexant has been in flux as officials try to steer the company back to the breakeven point. New CEO Daniel Artusi took the helm in June to lead the restructuring, and the company got a new CFO in September. (See Artusi to Helm Conexant and Conexent Names CFO.)

The de-emphasized products won't necessarily get sold off. "We are in discussion with several parties to sell some selected assets in some of these businesses, but the plan right now is to wind down these businesses," Artusi said on a conference call with analysts yesterday.

For its fourth quarter, which ended Sept. 28, Conexant reported revenues of $183.9 million and losses of $234.8 million, or 48 cents per share, compared with third-quarter revenues of $179.6 million and losses of $35.2 million, or 7 cents per share.

For its fourth quarter a year ago, Conexant reported revenues of $245.9 million and losses of $21.1 million, or 4 cents per share.

Conexant shares were down 2 cents (1.6%) at $1.21 in after-hours trading.

— Craig Matsumoto, West Coast Editor, Light Reading