* To cut 1,700 further jobs as eyes $320 mln cost savings
* Some jobs will be transferred to STMicro
* STMicro shares drop 13.8 pct, Ericsson down 4.4 pct
April 23 Chip maker ST-Ericsson will cut 1,700
jobs and shift a key part of its product to parent STMicro
, forcing the French co-owner to focus more on its
loss-making and volatile wireless business.
ST-Ericsson said it would partner with STMicro to develop
application processors, after failing to cut a deal with one of
four other companies.
The long-awaited strategic plan did little to convince
investors the troubled joint venture was getting back on track
and shares of STMicro accelerated losses after the announcement
to close down 13.8 percent.
ST-Ericsson, a 50-50 joint venture of Swedish group Ericsson
and French STMicro, is due to report a steep loss for
its January-March quarter later on Monday, adding to the $2
billion it has lost in its three years of operation.
Last year alone, ST-Ericsson reported a net loss of $841
million on sales of $1.65 billion
The venture has been hit by problems at its key clients --
revenue from Nokia and Sony Ericsson has shrunk 70
percent -- and it has struggled to compensate for this.
ST-Ericsson said the new and old restructuring measures
would bring savings of about $320 million when completed at the
end of 2013.
Chief executive Didier Lamouche said: "We need both cost
reduction, and also a revenue increase."
Lamouche said 1,700 job cuts would include several hundred
of staff which will be transferred to STMicro.
In addition to modems, ST-Ericsson's strength, today's
smartphones use application processors that function in the same
manner as a central processing unit (CPU) on a computer, running
software and graphics.
ST-Ericsson has been seen as a "strategic asset" for
potential buyers such as Nvidia, Intel and
Texas Instruments, sources familiar with the situation
told Reuters last month.
ST-Ericsson will release first-quarter results after markets
in the U.S. close.
Shares in Ericsson closed 4.4 percent lower at 61.60 crowns,
underperforming a 3.3 percent weaker STOXX 600 European