Ericsson - Ads Each Representing 1 Underlying Class B Share (MM) (NASDAQ:ERIC)
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Wireless chipset maker ST-Ericsson said Monday it will transfer its application processor research and development unit to STMicroelectronics as part of a new strategy.
As a result of the transfer, ST-Ericsson said its total workforce will be reduced by 1,700 employees, including those that will transfer to STMicroelectronics.
Additionally, ST-Ericsson said its new strategy will bring about annual cost savings of $320 million, by the end of 2013, while restructuring costs are estimated at between $130 million and $150 million.
ST-Ericsson is a joint venture created from the merger of the wireless chipset operations of Sweden's Ericsson (ERIC) and semiconductor maker STMicroelectronics N.V. (STM).
Largely focused on the shrinking market for cheaper low-end cell phones, Geneva-based ST-Ericsson has struggled to become profitable since it was formed in 2009.
At 1431 GMT, shares in Ericsson traded 4.1% lower at SEK61.85, in line with the 4.1% drop for the broader OMX Nordic 40 index.
-By Sven Grundberg, Dow Jones Newswires; +46-8-5451-3098; email@example.com