Layoffs hit 1,600 in Cypress deal
When the deal was announced in December, the companies said they expected to have combined revenues approaching $2 billion and save $135 million in annual costs within three years. It became apparent within less than a month of discussions about a potential merger that “we could run the combined companies a lot more efficiently,” said T.J. Rodgers, chief executive of the combined company, speaking in a video on the Cypress Web site.
This afternoon, Rodgers planned to speak to all North American employees of the combined company, he said iin an interview on Fox News. “They will know who is going and who is staying–we can’t let this thing languish,” he said, noting he had been reviewing org charts of the merged company down to groups as small as ten people.
It’s not clear if any product lines will be cut as part of the merger. However, Rodgers also stated on the video that “the current plan does not include cutting any major R&D programs.”
When the deal was announced the companies said they have little overlap in their product lines. In memories, Cypress is a leader in SRAMs and Spansion in NOR flash. Both companies have expanded into microcontrollers, but their product lines have little overlap, said an executive who manages the Cypress product line.
The combined companies could be the fourth or fifth largest supplier of memories and MCUs to the automotive industry, Rodgers said in the video. The companies both have design wins in car infotainment systems, but Cypress often supplies capacitive touch screen controllers while Spansion supplies controllers that run other dashboard functions, Rodgers said in the video.
The news comes little more than a week after NXP and Freescale announced plans for a much larger merger, creating a $10 billion company. If it is approved the two companies could be the world’s largest supplier of chips to auto makers and the second largest supplier of MCUs overall.
So far, NXP and Freescale execs have remained mum about their plans for layoffs. However their merger is expected to save $200 million in annual expenses in 2016 and as much as $500 million in the long run. The companies are said to have product overlap in the MCU lines.
Cypress’ stock price rose about $5 and Spansion’s about $15 after their merger plan was announced in December, putting the value of the deal at $5 billion. Cypress shareholders approved the merger on March 12, agreeing to issue 2.457 shares of Cypress stock to Spansion shareholders for each Spansion share they own.
— Rick Merritt, Silicon Valley Bureau Chief, EE Times
Related news:
Cypress and Spansion complete USD5 Billion all-stock merger
Spansion after Cypress merger: What automotive customers can expect
More for IoT: our natural roadmap says Cypress’ CEO
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