Qualcomm to lay off 5%, sources claim 2023

Qualcomm, a multinational chip manufacturer, will announce company-wide employment cuts affecting 5% of its workforce on May 3, according to sources familiar with the matter cited by Business Today.

“In the quarterly results, the company will declare 5% layoffs across the organization. This is due to a decline in sales and the ongoing tech slowdown, and while all competitors were cutting employment globally, Qualcomm was evaluating the situation and its strengths before making the decision, according to a source.

The tech giant’s mobile segment would be hit the most, according to sources.

Moreover, sources claimed that the majority of the layoffs would affect the tech giant’s mobile division. According to the source, Qualcomm’s mobile division will lay off about 20% of its employees.

“After conducting an assessment, [the company] determined that the mobile division must be realigned, so 20% of the positions will be eliminated. “The majority of jobs will leave the mobile division,” a source said.

Business Today contacted Qualcomm for confirmation and an official statement regarding the matter. The company responded to the questions and provided a statement made by CEO Cristiano Amon during the February 2023 earnings call.

Given the present macroeconomic and demand conditions, we are implementing additional spending cuts and streamlining operations without losing sight of the significant growth and diversification opportunities that lie ahead.

This is consistent with our commitment from our last earnings call to actively manage operating expenses. In conjunction with the actions we have already taken in the quarter, we expect to reduce non-GAAP operating expenses by approximately 5 percent relative to a run rate at the end of fiscal ’22,” Qualcomm’s CEO stated.

According to a second source with knowledge of the situation, Qualcomm has been experiencing difficulties due to a decline in smartphone sales.

Due to recent smartphone sales declines, Qualcomm’s resources are being reorganized.

Qualcomm’s net income decreased by 34% year-over-year (YoY) for the quarter ending in December 2022. The company’s revenue decreased by 12 percent from the previous year.

This was due to the macroeconomic downturn and the decline in mobile phone demand. Qualcomm is directly impacted by the decline in smartphone sales because semiconductor manufacturing is one of its primary revenue-generating operations.

The data analysis firm International Data Corporation reported in January that smartphone shipments decreased by 11.3% worldwide in 2022, prompting smartphone manufacturers to adopt a cautious stance. In its most recent report, the market research firm predicted that global smartphone shipments would decline by 1.1% in 2023.

Leave a Comment