The company says that "with today's market outlook appearing quite different than it did just a few months ago, ST-NXP Wireless is taking necessary action to adapt its R&D resources and cost structure to the new business conditions in the industry."

The product portfolio and anticipated development efforts of the combined company are being "rationalized".

STNXP says the job losses will be from both full time staff and subcontractors. Currently the combined group employs 7,500 people.

In a statement Thursday (Nov. 6) the company said "this headcount reduction and the progressive termination of transitional services purchased from its non-consolidating parent are targeting, under an accelerated timeline, the approximately $250 million of cost savings anticipated at the time of the mergers announcement. Restructuring charges are anticipated in the range of $50 million, mostly accrued in ST-NXP Wireless and STs consolidated balance sheet at the end of September 2008."

ST owns 80 percent of the venture; in the deal that created the venture NXP got the other 20 percent along with $1.55 billion in cash from ST.

The venture was created from businesses that together generated $3 billion in revenue in 2007 and owns thousands of communication and multimedia patents. It is set to be one of the top three semiconductor companies in the wireless industry rivalling Texas Instruments and Qualcomm Inc.

When announced in April 2008, the companies said the the venture would combine design, sales and marketing, and back-end manufacturing assets from both companies and use its parent companies and foundries for wafer fabrication services. The group planned to address UMTS, TD-SCDMA, WiFi, Bluetooth, GPS, FM Radio, USB, and UWB standard.

It also integrates the Silicon Laboratories wireless and GloNavs GPS operations.

In August, Ericsson Mobile Platforms said it would join the combined group in a 50:50 merger that pursues size for competitive advantage.

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