Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: snowbird who wrote (63365)	1/21/2000 7:24:00 PM
From: William Hunt	Respond to of 152472

Thread---Hundreds lose jobs in phone unit sale Fallout from Qualcomm deal with Japanese firm By Mike Drummond UNION-TRIBUNE STAFF WRITER January 21, 2000 SAN DIEGO -- Hundreds of Qualcomm's full-and part-time employees are losing their jobs, a result of the company's decision to sell its phone-making business to Japan's Kyocera. Qualcomm is transferring about 4,000 workers to Kyocera as part of the sale, and Kyocera Wireless Corp., the new division formed by the sale, is cutting many of them from its payroll to make the unit profitable. Security guards at the La Jolla manufacturing plant began escorting furloughed employees to their cars yesterday, a process that's expected to end by early next week, said Dan Sullivan, Qualcomm's vice president for human resources. The phone-making division employed workers from both Qualcomm itself and Qualcomm Personal Electronics, the company's joint venture with Sony of Japan. The vast majority of layoffs come from QPE; most of the Qualcomm workers -- including Qualcomm Consumer Products president Paul Jacobs -- have found jobs with the company's new subsidiary, which will work hand-in-glove with Kyocera. Laid-off workers will get a "generous" severance package, which includes cash payouts and job-placement services, Sullivan said. However, Qualcomm employees losing their jobs will not get to keep unvested portions of their stock options, an issue that fueled a continuing class-action lawsuit from workers after Qualcomm sold its network equipment manufacturing business to Swedish rival Ericsson last year. The QPE workers were never eligible for Qualcomm's stock option plan. Instead, they were granted a performance unit plan, which workers say was worth a mere fraction of the Qualcomm plan. Sullivan said the sale, which analysts estimate to be for $250 million to $500 million, is expected to close by the end of February. He added that Kyocera "reports to us that . . . San Diego will continue to be a manufacturing hub. "Kyocera is working very hard to get their arms around the manufacturing in a way that will cause them to ramp up to much higher production levels that are equal to or greater than the maximum number Qualcomm had in this facility." Qualcomm had announced in September that it would sell its handset division, a business once necessary to help seed the market with mobile phones using the company's patented code division multiple access or CDMA wireless technology. The handset unit was barely making a profit. After Qualcomm announced its intent to sell, the company's stock, already hitting record highs, shot into an unprecedented orbit to easily become the best-performing issue on the Standard & Poor's index. But the cheers on Wall Street weren't shared by those inside the company who are not eligible for Qualcomm's lucrative stock-option plan. And when Qualcomm named Kyocera as the buyer, some bemoaned that fact that their next employer was a relative unknown -- at least domestically. The deal allows Qualcomm to focus on its profitable chip business and technology licensing agreements while helping Kyocera to begin making consumer phones for the general U.S. market. Two days before the announced sale, Qualcomm initiated a 4-for-1 stock split, the first such split in company history. During the last frenzied days and hours before the split, the company's stock touched $800 a share. The company will report results from the first fiscal quarter Tuesday. If recent history is any guidepost, then the company's report should please the legions of investors who have buoyed Qualcomm's market valuation to $102.7 billion. Qualcomm stock, which trades under the ticker symbol QCOM, closed up $9 yesterday at $155.621/2. BEST WISHES BILL