Qualcomm, a global chip manufacturer, is planning to cut 5% of its workforce, affecting around 2,550 employees. The announcement will be made during the company’s upcoming quarterly results scheduled for May 3. The job reductions are reportedly due to a drop in sales and the ongoing technology slowdown. While many players have been cutting jobs globally, Qualcomm has been assessing the situation and its strengths before making the decision to implement layoffs.
Most of the job cuts are expected to affect Qualcomm’s mobile division, with approximately 20% of employees in that division to be laid off. The company realized that the mobile division needs to be realigned and adjusted to align with the current market situation, leading to the decision to reduce its workforce. However, Qualcomm has not confirmed these reports, and Business Today has reached out to the company for an official statement.
Qualcomm’s CEO, Cristiano Amon, had previously hinted at cost-cutting measures during the earnings call in February 2023. “Given the current macroeconomic and demand environment, we’re implementing further spending reductions and streamlining operations without losing sight of the significant growth and diversification opportunities ahead. This is consistent with our commitment to actively manage operating expenses as indicated during our last earnings call,” he said.
The decrease in smartphone sales has affected Qualcomm over the previous quarters, resulting in adjustments to its resources. In December 2022, Qualcomm’s net income declined by 34% YoY, and its revenue decreased by 12% from the previous year. These factors have had a direct impact on the company’s chip manufacturing business, which is a significant source of its revenue.
The global smartphone industry has also faced challenges, with a decline of 11.3% in 2022, according to data analysis firm International Data Corporation. As a result, smartphone manufacturers have become more cautious. The research firm predicts that there will be a further 1.1% decline in global smartphone shipments in 2023. These factors have led Qualcomm to take action to streamline its operations and reduce costs to navigate through the ongoing technology slowdown.