Qualcomm to cut jobs; chip manufacturer to lay off 5% staff, say sources

Qualcomm, the multinational chip manufacturer, will announce company-wide job cuts impacting 5 per cent of its staff in its upcoming quarterly results on May 3, sources aware of the matter told Business Today.

"In the quarterly results company is going to announce 5 per cent layoffs across the company. This has been due to a drop in sales and the ongoing tech slowdown, while all players were cutting jobs globally, Qualcomm was assessing the situation and its strengths and has now made the decision," the source claimed.

Moreover, people aware of the matter claimed that most of the cuts would impact the mobile division of the tech giant. Qualcomm's mobile division will lay off about 20 per cent of its employees, according to the source.

"After assessment, [the] company realised that mobile division needs to be realigned so they will cut 20 per cent jobs there. Most jobs will go from mobile division," the source said.

Business Today reached out to Qualcomm for confirmation and an official comment on the same. The company responded to the queries and shared a statement made by Cristiano Amon, the CEO of the company 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. Combined with the actions we have already taken in the quarter, we expect to reduce non-GAAP operating expenses by approximately 5 per cent relative to a run rate exiting fiscal '22," Qualcomm's CEO said.

Another source aware of the matter noted that Qualcomm has been facing difficulties due to a slump in smartphone sales.

"The drop in smartphone sales in past quarters has impacted Qualcomm and the company is realigning resources," the source said.

Qualcomm reported a decline of 34 per cent year-on-year (YoY) in net income in the quarter ended December 2022. The revenue of the company fell 12 per cent from a year ago. This was attributed to the macroeconomic slowdown and the drop in demand for mobile handsets. The slump in smartphone sales directly impacts Qualcomm since chip manufacturing is one of its major revenue-generating operations.

In January, data analysis firm International Data Corporation reported that smartphone shipments have fallen 11.3 per cent in 2022 globally, causing smartphone manufacturers to take a cautious approach. Moreover, in the latest report, the research firm noted that global smartphone shipments are further expected to decline 1.1 per cent in 2023.

Also Read: Start-up layoffs: Tickertape fires 33% employees, to hand control back to Smallcase - BusinessToday

Also Read: TCS, Infosys, Wipro: Are huge bench sizes dragging down Indian IT majors? - BusinessToday