Layoffs 2023: Qualcomm, a leading global microchip manufacturer, is set to trim its workforce amid financial constraints.
The San Diego, California-headquartered firm has disclosed plans to cut approximately 1,258 positions within the state, as per a notification to the California Employment Development Department. The job cuts, slated for December 13, span a variety of roles including engineers, legal counsel, and human resources personnel, located in San Diego and Santa Clara, CNN reported.
The workforce reduction follows on the heels of Qualcomm’s announcement last month concerning a deal with Apple, which entails supplying 5G chips through at least 2026. Moreover, Qualcomm is the chosen chip supplier for the recently unveiled Meta Quest 3.
Despite these ventures, financial headwinds loom over Qualcomm as revealed in an August analyst call by Chief Financial Officer, Akash Palkhiwala.
Qualcomm has felt the pinch of dwindling smartphone sales.
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The chip giant’s Q3 2023 earnings (the financial year is from October to September) revealed a 25 per cent slump in mobile chip sales year on year, plummeting to $5.26 billion. Concurrently, the net income took a 52 per cent hit compared to the last year’s corresponding quarter. The outlook isn’t rosy either, with Qualcomm bracing for a further dip in handset sales this year by a high-single-digit percentage, as per its own prognostications. The slump is attributed to a sluggish global economy coupled with a tepid recovery pace in China.
In a bid to navigate the financial turbulence, Qualcomm is tightening its belt by reducing its headcount. As many as 415 positions were already axed at its San Diego base earlier this year.
Citing a proactive approach towards cost management in light of dwindling revenue, Palkhiwala told CNN, “Given our commitment to operating discipline, we will proactively implement additional cost actions. Until we see sustained signs of improving fundamentals, our operating framework does not assume an immediate recover.”
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The impending layoffs underscore a cautious fiscal stance by Qualcomm, even as it navigates key partnerships in the competitive microchip landscape.
