Qualcomm, the world's largest maker of smartphone chips, has announced plans to significantly reduce its workforce. The company is set to lay off approximately 1,258 employees in its California offices, representing around 2.5 percent of its total workforce.
According to filings with the California Employment Development Department, Qualcomm will eliminate 1,064 positions in San Diego and 194 positions in Santa Clara. The job cuts are expected to take effect starting mid-December, with no facility closures planned at either location.
The layoffs will impact a wide range of roles within the company, with more than 750 positions being eliminated from Qualcomm's engineering ranks, spanning from directors to technicians. The remaining cuts will come from various roles, including internal technical staff and accounting.
Qualcomm's decision to implement workforce reductions comes as the company faces a challenging market landscape. The semiconductor manufacturer reported a projected revenue shrinkage of about 19 percent for the current fiscal year, primarily due to sluggish demand for smartphones, particularly in China. Although CEO Cristiano Amon is actively pursuing diversification efforts, Qualcomm's heavy reliance on the phone market continues to impact its sales performance.
Chief Financial Officer Akash Palkhiwala acknowledged the need for additional cost-cutting measures, stating, "Until we see sustained signs of improving fundamentals, our operating framework does not assume an immediate recovery."
This announcement adds to the growing list of tech industry layoffs in 2023, marking a tumultuous year for the sector. Major companies such as Google, Meta (formerly Facebook), Amazon, Microsoft, and Salesforce have also implemented workforce reductions. The total number of layoffs in the tech industry this year has surpassed those in 2022, affecting tens of thousands of tech workers across various sectors.
With the Qualcomm layoffs set to commence in December, the company aims to navigate the uncertain macroeconomic and demand environment while redirecting resources towards key growth and diversification opportunities. The restructuring actions are expected to be substantially completed by the first half of fiscal 2024, with significant restructuring charges anticipated in the fourth quarter of fiscal 2023.
