Qualcomm plans to lay off 5% of its workforce amidst economic uncertainty
Qualcomm, the global chip manufacturer, will reveal company-wide job reductions that will impact 5% of its workforce in its forthcoming quarterly results, scheduled for May 3.
"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, according to a report by Business Today.
Additionally, insiders have disclosed that the majority of the reductions will affect the mobile division of the technology giant, with around 20% of Qualcomm's mobile division employees to be laid off.
"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 also contacted Qualcomm to request official confirmation and a statement regarding the matter. The company replied to the inquiries and shared a statement made by its CEO, Cristiano Amon, 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.
According to another insider, Qualcomm has encountered challenges due to a decline in smartphone sales. "The decrease in smartphone sales over the previous quarters has affected Qualcomm, and the organization is making adjustments to its resources," the source stated.
In the quarter that ended in December 2022, Qualcomm's net income declined by 34% year-on-year (YoY), and its revenue decreased by 12% from the previous year. This was mainly due to the macroeconomic slowdown and a decrease in demand for mobile devices, which directly affected the company's chip manufacturing business, a significant source of its revenue.
Global smartphone shipments have faced a decline of 11.3% in 2022, as reported by data analysis firm International Data Corporation in January. As a result, smartphone manufacturers have become more cautious. In its latest report, the research firm predicts that there will be a further 1.1% decline in global smartphone shipments in 2023.