Ericsson, STMicroelectronics have inked an agreement to dissolve their four-year old joint venture ST-Ericsson.

Under the terms of the agreement, the respective companies will absorb the employees that were part of the JV – Ericsson is expected to assume approximately 1,800 employees and contractors, with the largest concentrations in Sweden, Germany, India and China; ST will assume approximately 950 employees, primarily in France and in Italy.

In connection with the transfer of the majority of its workforce to the parent companies, ST-Ericsson will carry out restructuring of its current operations which could impact some 1,600 employees worldwide, out of which in a range of 500-700 are in Europe, including 400 to 600 positions in Sweden and 50 to 80 positions in Germany.

The agreement also specifies that Ericsson will take on the design, development and sales of the LTE multimode thin modem products, including 2G, 3G and 4G multimode; whereas ST will take on the existing ST-Ericsson products, other than LTE multimode thin modems, and related business as well as certain assembly and test facilities. The remaining parts of ST-Ericsson will be shut down. 

The formal transfer of the relevant parts of ST-Ericsson to the parent companies is expected to be completed during the third quarter of 2013, subject to regulatory approvals.

In another development, Carlo Ferro has been appointed president and CEO of ST-Ericsson, effective April 1, 2013. Mr. Ferro is currently COO of ST-Ericsson, and succeeds Didier Lamouche, who has left to pursue opportunities outside the company. Mr. Ferro will lead the work in securing both business continuity of ST-Ericsson and effective completion of the transition phase.