Qualcomm (NASDAQ:QCOM) is cutting 1,314 full-time jobs at its San Diego headquarters and hundreds of jobs in other locations, part of a previously announced restructuring the chipset giant its undertaking as it reacts to a slowing smartphone market.
According to the San Diego Union-Tribune, Qualcomm gave 60-days' notice yesterday as required by the Worker Adjustment and Retraining Act (WARN) and those who are losing their jobs will have their final day on Nov. 20.
The culling Qualcomm is making represents the majority of the cuts that will come to its San Diego offices as part of the restructuring, the report said. "A workforce reduction is never easy," said Qualcomm President Derek Aberle in a statement to the Union-Tribune. "The company is providing supportive severance packages, outplacement resources and career transition resources for those employees affected during this difficult time."
In July Qualcomm struck a deal with an activist shareholder and agreed to cut $1.4 billion in costs, slash up to 15 percent of its workforce, change some of its corporate practices and review whether to split up its chipset and licensing units. Qualcomm has roughly 31,300 employees, so a 15 percent cut would imply that Qualcomm will slash up to 4,695 jobs over the next year.
As of May, the silicon vendor employed about 15,000 full-time, part-time and temporary workers in San Diego, according to the Union-Tribune. Qualcomm also confirmed that it slashed 158 jobs in Boulder, Colo., 130 jobs in the San Francisco Bay Area and 65 in Andover, Mass., the report added. However, Qualcomm declined to say how many jobs it is cutting at its dozens of international locations, so the numbers revealed so far do not reflect all of the cuts the company has made.
Qualcomm declined to release details of the severance for workers, the report said, but the firm said all full-time workers get 60 days' notice and "supportive" exit packages.
Qualcomm said in July it intends to "focus its investments in technologies that scale across core smartphone and adjacent growth opportunities, such as in its leading modem and other differentiated technologies." Qualcomm is reducing its investments outside of its core chipset and licensing units "and will focus these investments around the highest-return opportunities, including data centers, small cells and certain IoE verticals."
According to a report earlier this month from Re/code, which cited unnamed sources, Qualcomm has put its augmented reality business, Vuforia, up for sale. As the smartphone market has matured, especially in the United States, Western Europe and now a bit in China, Qualcomm has branched out to fields like connected cars, servers, the Internet of Things and smart cities in search of growth.
"We are in a position where we have to pivot the company," Qualcomm CEO Steve Mollkenkopf said in a recent interview with the Union-Tribune. "Now we are working on where do we grow outside of the phone. A lot of what we are doing this year is repositioning the company's resources so we can continue to deliver on the phone opportunity but more importantly deliver on these new opportunities."
As for Qualcomm's plans to potentially split its chipset and licensing units, Aberle said that might not be in the cards. "You have to step back and say why is that and would a separation actually solve whatever the underlying issues are that are creating the current valuation?" he told Reuters earlier this month. "You have to be careful that it's not too simplistic an analysis."
For more:
- see this San Diego Union-Tribune article
- see this AP article
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