US communications components company Maxlinear has been closing down its development center in Herzliya in recent days and has laid off all but a few of its employees, sources inform "Globes." The layoffs were part of the company's downscaling of its activity in Israel over the past two years, in which it cut its staff from 50 when the branch was founded to 25. 20 of the remaining employees have now been laid off; the remaining five employees will go on working for Maxlinear in a shared workspace at WeWork.
Maxlinear, which manufactures semiconductors for broadband communications, has a $1.11 billion market cap on the New York Stock Exchange. The company's revenue totaled $420 million in 2017.
Maxlinear opened its development center in Israel in 2016, based on Israeli startup Provigent, which Maxlinear acquired from Broadcom in 2016. Broadcom acquired Provigent in a $340 million deal in 2011.
Provigent, founded in 2000, raised $55 million. The company had 150 employees when it was acquired by Broadcom. Provigent developed wireless broadband communications chips for the large mobile phone infrastructure of companies such as Huawei and Nokia-Siemens.
Broadcom became interested in Provigent with the growth of the smartphones market, which blocked up the mobile communications networks existing at the time. These networks failed to provide the speed necessary for smartphone users. It was believed that the demand for Provigent's chips would grow as a result, due to the need for solutions accommodating wireless broadband communications. Communications companies, however, eventually either preferred their own communications components to Provigent's chips or developed chips by themselves.
Broadcom sold its wireless activity, including Provigent, to Maxlinear for only $88 million in 2016. Maxlinear laid off 70 of Provigent's 120 employees, while 50 became employees of Maxlinear's development center in Israel. Sources close to the company believe that the reason for the layoffs was that Maxlinear wanted a lean operation as a basis for its Israeli development center. There have been several cutbacks at the development center since then, leaving it with 25 employees before it closed down.
Maxlinear declined to comment on the report.
Published by Globes, Israel business news - en.globes.co.il - on December 27, 2018
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