Qualcomm starts cutting thousands of jobs to save $1 bn

Qualcomm has started cutting thousands of jobs, negatively impacting both full-time and temporary employees, as part of its cost-reduction plans, according to media reports.
Qualcomm 5G Modem Optimized for IIoTQualcomm, one of the key suppliers for smartphone companies, may eliminate 1,500 jobs in California alone. Qualcomm is facing significant challenges in selling chipset to smartphone makers which are still trying to sell pending inventories.

Shipment of smartphones will decline 1.1 percent in 2023 to 1.19 billion units. Real market recovery in the global smartphone market is not expected to occur until 2024, IDC expects. Supply of chipset to top Android-based smartphone makers brings majority of revenue to Qualcomm.

Qualcomm reported revenue of $9.463 billion (–12 percent) and net income of $2.235 billion (–34 percent) for its fiscal first quarter ended December 25, 2022.

Qualcomm has generated revenue of $5,754 million (–18 percent) from Handsets, $456 million (+58 percent) from Automotive and $1,682 million from (+7 percent) IoT during the quarter. Most of the semiconductor companies are betting on Automotive business, but Qualcomm is a small player in Automotive business at present.

Qualcomm aims to cut costs by $1 billion.

As part of the cost reduction plan announced in January, Qualcomm is conducting a reduction of our full-time and temporary workforce. A workforce reduction, such as this one, affects not only those employees who are part of the reduction, but their families, co-workers and the community, the chip giant said in a statement.

Qualcomm offered affected employees supportive severance packages to reduce the impact of the transition on them.

“We first evaluated non-headcount expense reductions, but we concluded that a workforce reduction is needed to support long-term growth and success, which will ultimately benefit all our stakeholders,” the US-based Qualcomm said.

Meanwhile, South Korea’s Supreme Court this month finalized a ruling in favor of the national antitrust regulator’s record fine of 1 trillion won ($760.8 million) imposed in 2016 on US chipmaker Qualcomm for unfair business practices.

The fine was imposed by the Fair Trade Commission (FTC), which concluded in December 2016 that the San Diego-based company and its two affiliates breached South Korea’s competition law by refusing to offer licenses to chipset manufacturers and demanding high fees for patents used by smartphone makers.