One of the largest smartphone chip manufacturers, Qualcomm, plans to lay off 1,258 employees in California. The job cuts will impact staff at Qualcomm's San Diego and Santa Clara facilities and will take effect around December 13. The layoffs represent 2.5 percent of the company's total workforce.
The layoffs were revealed (via CNN) in a filing to the California Employment Development Department. Affected roles span engineering, legal, human resources and other sections. According to Qualcomm executives, the layoffs are part of cost-cutting measures in response to declining revenue and softening demand.
Qualcomm is feeling pressure on revenues as smartphone sales slow globally. It also faces the potential loss of a major client, as analyst Ming-Chi Kuo reported Huawei may shift from Qualcomm chips to domestic suppliers for orders beginning next year.
In an earnings call last month, CFO Akash Palkhiwala warned that the company would implement further cost reductions due to ongoing economic uncertainty. He noted Qualcomm's commitment to operating discipline means proactively trimming expenses until industry fundamentals improve.
Qualcomm's latest layoff follows in the footsteps of other chipmakers such as Intel and Micron Technology. In August, Intel plans to lay off more than 300 workers at its California offices. Micron also cut 10% of its workforce, or about 4,800 jobs, and suspended bonuses in early 2023.
This news comes on the heels of the announcement of the new Snapdragon X-series chips for PC. The company revealed earlier this week that it would be dropping the 8cx branding for its future PC chips in favor of something new - the Snapdragon X series.
On the other hand, last month, we reported that Qualcomm will provide Snapdragon 5G Modem-RF Systems for products Apple will introduce in 2024, 2025 and 2026. The agreement comes as a surprise, as it was widely expected that Apple would begin using its own internally developed 5G modems in 2024's iPhone.
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