As part of its promise to investors to reduce costs by $1 billion, Qualcomm has started cutting around 1,500 jobs. Most of these layoffs will take place in California, but Bloomberg reports that there will be some losses in other locations.
Qualcomm, which employees around 33,800 employees globally, is set to file Worker Adjustment and Retraining Notification (WARN) notices with California in the next few days—a requirement when firms cut 50 or more employees within a 30-day period. It also requires that companies give affected employees 60 days’ notice before being let go.
“We first evaluated non-headcount expense reductions, but we concluded that a workforce reduction is needed to support long-term growth and success, which will ultimately benefit all our stakeholders,” Qualcomm said, in a statement.
Qualcomm, which eliminated thousands of jobs back in 2015, has been going through a tough time recently. It promised to cut $1 billion from its expenses as part of the plan to fight off a hostile takeover bid from Singapore-based rival Broadcom—a move supported by shareholders but ultimately blocked by the Trump administration over national security concerns. Despite the government intervention, management must still live up to the promise, which should help ease its financial concerns.
The chipmaker’s earnings have tumbled since its legal battles with Apple began; it saw a 90 percent drop in profit during Q4 2017. Qualcomm's problems were compounded by a $1.2 billion EU fine in January for violating antitrust laws, and it’s looking increasingly likely that Apple will drop Qualcomm’s tech from its future products, turning to Intel and MediaTek for its modem chips instead.
When asked about the cuts, Qualcomm gave the following statement:
As part of the cost reduction plan announced in January, Qualcomm is conducting a reduction of our full-time and temporary workforce.
A workforce reduction, such as this one, affects not only those employees who are part of the reduction, but their families, co-workers and the community. We recognize this and have offered affected employees supportive severance packages to reduce the impact of this transition on them.
We first evaluated non-headcount expense reductions, but we concluded that a workforce reduction is needed to support long-term growth and success, which will ultimately benefit all our stakeholders.