Freescale has given up trying to find a buyer for the whole of its cellular handset unit and is now going to reduce the unit to a group which will support current products and customers but not enter into new product development.
"We're creating a small unit of people to support existing products and customers and will continue to support them for some years", Rich Beyer, CEO of Freescale, "told Electronics Weekly, "they will support existing customers and existing products, but there will be no future product development, and no market development."
"We have transferred a fair number of people from the cellular products group to other parts of Freescale", added Beyer, "and are letting the remainder of the people go." Severance payments of $70m are anticipated for those who are being let go.
Freescale has been trying to sell its cellular handset division ever since Beyer took over as CEO in February 2008.
However deteriorating conditions in the cellular market have made it an impossible task.
In a statement, Freescale said: 'The company recently initiated actions to complete the exit of the cellular handset business. These actions encompass employment reductions with certain severance and other exit costs. We anticipate completing these actions by December 31, 2009. Implementation of this plan and any specific employment actions are subject to satisfaction of legal requirements, including prior consultation on the plan with work councils in some of the countries in which we operate.'
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