On October 12, Qualcomm Inc., the leading smartphone chip manufacturer, announced a significant reduction in its workforce. A total of 1,258 employees are set to be laid off from its offices in San Diego and Santa Clara, California, as per recent reports. This decision is a response to declining demand for its primary product.
Of the affected employees, over 750 come from Qualcomm’s engineering departments, spanning positions from the director level to technicians. The remaining layoffs will encompass a range of roles, including internal technical staff and accounting. These workforce reductions are scheduled to commence around mid-December.
Further details reveal that of the 1,258 job cuts, around 1,064 will be from Qualcomm’s San Diego office, with the remaining 194 from its Santa Clara office. Despite the significant job losses, no facilities are expected to close. As of September 2022, Qualcomm’s total workforce was approximately 51,000, indicating that the upcoming layoffs will impact roughly 2.5% of the company’s employees.
There has been a noticeable downturn in Qualcomm’s revenues. Global mobile product sales have stagnated, causing a drop in revenue. While Qualcomm has diversified into areas like automotive chips and VR headsets, smartphone chips remain its primary revenue source.
The company is also navigating challenges in its patent licensing business in China. Nevertheless, Qualcomm’s focus is on cost reductions and ongoing investments in growth sectors. The company’s Chief Financial Officer had previously hinted at such measures in August, primarily attributed to an anticipated 19% reduction in revenue for the current fiscal year.
As the semiconductor and smartphone industry undergoes transformation, companies like Qualcomm are adapting to these shifts in demand and market dynamics. Despite the considerable layoffs, Qualcomm seems well-positioned to steer through the evolving landscape, eyeing new growth avenues in upcoming years.