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Layoffs expected this week at Qualcomm as company ponders strategic split

By Shawn Knight
Jul 21, 2015
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  1. Qualcomm could be the next in a growing list of tech companies to consider a strategic split. The company is preparing to conduct a sweeping review that will examine the possibility of a breakup according to people familiar with the matter as reported by The Wall Street Journal.

    Activist investor Jana Partners LLC is said to be spearheading the campaign. Jana, which recently revealed it owns a stake of more than $2 billion in Qualcomm, has in recent months urged the chip maker to cut costs, repurchase shares at a faster rate, add new members to its board of directors and explore a breakup.

    The publication notes that a breakup would almost certainly involve the separation of Qualcomm’s chip production business from its patent-licensing arm.

    Qualcomm is scheduled to report fiscal third quarter results on Wednesday. A separate report from The Information claims the company will also announce it is laying off roughly 10 percent of its global workforce, or around 3,000 employees.

    Qualcomm’s recent troubles are a prime example of the instability in the tech community. Almost a year ago to the day, the company reported strong fiscal third quarter earnings but delays in getting it flagship Snapdragon 810 to market as well as Samsung’s decisions to pass on the chip (due to overheating concerns) in favor of its homegrown Exynos processor to power the Galaxy S6 and S6 Edge really hurt its bottom line.

    If a split is indeed in Qualcomm’s future, the company would be following in the footsteps of other tech giants including HP, Philips, Symantec and eBay. The latter company successfully spun off PayPal into an independent entity just days ago while HP’s split is slated for November 1.

    Image courtesy Reuters

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    Last edited by a moderator: Jul 22, 2015

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