Qualcomm Layoffs: Tech Giant Gives Massive Blow For 1,258 Employees
/ Qualcomm’s layoffs: 1,258 jobs cut due to smartphone chip demand decline – a tech giant’s response to economic challenges.
By Babloo Farkade.
Oct 13, 2023, 10:21 AM IST
In a disheartening turn of events, Qualcomm, a prominent player in the tech industry, has announced a significant layoff affecting more than 1,000 employees. As reported by Benzinga and Gadgets Now these layoffs will primarily impact the company’s offices in California, specifically in the areas of Santa Clara and San Diego.
Qualcomm’s Restructuring Strategy
Qualcomm’s decision to downsize its workforce comes as part of a broader restructuring initiative, as disclosed in the company’s quarterly earnings report. The report stated, “Given the continued uncertainty in the macroeconomic and demand environment, we expect to take additional restructuring actions to enable continued investments in key growth and diversification opportunities.”
Workforce Reductions Expected
While Qualcomm is still in the process of developing its restructuring plans, the company expects these actions to primarily involve workforce reductions.
These job cuts, primarily in engineering and internal technical roles, come in response to declining smartphone chip demand. However, it anticipates incurring significant restructuring charges, with a substantial portion expected to materialize in the fourth quarter of fiscal 2023. The additional actions are projected to be substantially completed within the first half of fiscal 2024.
Layoffs by the Numbers
In this recent round of layoffs, a total of 1,258 employees will be affected. Out of this number, 1,064 employees hail from San Diego, with the remaining 194 located in Santa Clara. It’s worth noting that these workforce reductions do not entail the closure of any offices in either of the two regions. Qualcomm remains committed to its presence in both Santa Clara and San Diego.
$QCOM | Layoffs At Qualcomm: Over 1200 Positions On Chopping Block As Smartphone Chip Demand Takes A Dive
— Benzinga (@Benzinga) October 12, 2023
Challenging Financial Metrics
The layoffs do not come as a complete surprise, as Qualcomm’s Q3 earnings for 2023 revealed a 25% decrease in sales of mobile chips compared to the previous year, amounting to $5.26 billion. Simultaneously, net income saw a significant drop of 52% year over year in the last quarter.
Market Projections and Economic Factors
Qualcomm has expressed its anticipation of a further decrease in handset sales for the remainder of the year, projected to be at least a high-single-digit percentage. The company attributes this decline in sales to the challenges posed by a weakened global economy and a slow recovery in the Chinese market.
This news of layoffs at Qualcomm serves as a reminder of the ongoing challenges faced by tech companies in an ever-evolving industry. While these measures are undoubtedly difficult for the affected employees, Qualcomm’s aim is to adapt to the changing market landscape and emerge stronger, as it continues to navigate uncertain economic waters.