ST-Ericsson completes business restructure

The disintegrating joint venture between STMicroelectronics and Ericsson, ST-Ericsson, has completed its restructuring and the transfer of business, assets and employees to Ericsson, STMicroelectronics and third party buyers.

After what is described as “months of intensive work,” the parent companies agreed to split up the JV, with Ericsson taking on the design, development and sales of the LTE multimode thin modem products, including 2G, 3G and 4G multimode; while ST takes on the existing ST-Ericsson products, other than LTE multimode thin modems and related business, as well as certain assembly and test facilities.

On August 2, 2013 ST-Ericsson transferred approximately 1,800 employees and contractors to Ericsson, primarily in Sweden, Germany, India and China. On the same date, ST-Ericsson also transferred approximately 1,000 employees to ST, primarily in France and in Italy to fuel growth of the existing ST businesses.

Over the past few days ST-Ericsson also said that it 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 Sweden, and a Wireless LAN team based in India, which sees approximately 200 employees securing a new employer. ST-Ericsson added that it has completed all required employee-related procedures in the last four months.

Carlo Ferro, president and CEO of ST-Ericsson, who was appointed on April 1, 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.”

Ferro added that the transition has been completed executing on time and with lower costs than anticipated.

“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.”