Qualcomm plans to start a new round of layoffs.
On October 13, the US chip giant Qualcomm said in a document submitted to the California Employment Development Department that the company will lay off 2.5%, mainly in California, plans to lay off 1064 people in San Diego and 194 people in Santa Clara, California, and the layoffs will be carried out in mid-December.
Back in August, Qualcomm had warned that consumer spending on electronics such as smartphones continued to weaken due to slowing global economic growth. It forecast fourth-quarter sales below market expectations and said it may cut jobs. Qualcomm last reported a global workforce of 51,000.
As of June 25, 2023, the third fiscal quarter earnings data showed that Qualcomm's adjusted total revenue was $8.44 billion, down 23% from the same period last year, lower than the expected $8.5 billion; Adjusted earnings per share of $1.87, above estimates of $1.81 per share; Net income fell 52% to $1.8 billion from $3.73 billion a year earlier.
Qualcomm CDMA Technologies Group (QCT) is Qualcomm's largest division and sells processors used in smartphones, cars and other smart devices. In the fiscal third quarter, the division's sales were $7.17 billion, down 24% from a year earlier. Among them, Qualcomm's main mobile phone chip business revenue fell 25 percent to $5.26 billion.
During a conference call with analysts for Qualcomm's fiscal third-quarter earnings, CEO Ammon said at the time that the company would further cut costs. Qualcomm also said in a regulatory announcement that the cost cuts would include job cuts, but did not specify how many jobs would be affected.
Akash Palkhiwala, Qualcomm's chief financial officer, said: "Until we see signs of continued fundamental improvement, there will be no immediate recovery in our operating framework, and cost-cutting measures will continue into the company's next fiscal year."
In September this year, Qualcomm's research and development department in Shanghai also reported layoffs. On September 21, Qualcomm responded to the layoffs rumors that the company's third-quarter report said that in view of the continued uncertainty in the macroeconomic and demand environment, the company expects to take further adjustment measures to achieve continued investment in important growth opportunities and business diversification.
Qualcomm said that while the corresponding plan is still being developed, it expects that the main measures will include layoffs, and there will be significant additional adjustment charges associated with such measures, a significant portion of which is expected to occur in the fourth quarter of fiscal 2023. The corresponding adjustment measures are expected to be substantially completed in the first half of fiscal 2024. The adjustment measures taken in China are also part of the corresponding plan of foreign communication.