Qualcomm’s layoffs reach 1,800 as NXP deal hangs in limbo

China and the US may come to terms over the US import ban imposed on ZTE (Image simarik / iStockPhoto)
China and the U.S. recently resolved a dispute centered on ZTE. (simarik/iStockPhoto)

Qualcomm’s management continues to juggle multiple challenges in locations around the world, with the company’s latest setback in China casting a pall over its attempts to close its acquisition of NXP.

Specifically, as Bloomberg noted, Qualcomm had reportedly received China’s approval on Friday to purchase NXP—a transaction initially announced in October 2016—according to an article in the South China Morning Post.

However, just minutes later, President Trump authorized tariffs on $50 billion worth of Chinese goods, an action that may have led the Chinese to withhold their approval for Qualcomm’s NXP deal.

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Qualcomm’s long-running attempts to purchase NXP stem from the company’s desire to expand beyond the slowing smartphone business and into the automotive industry. But those efforts appear to have been hampered by souring U.S.-China relations—China is the only country that has not signed off on Qualcomm’s purchase of NXP.

A recent U.S. government agreement to allow ZTE to continue operating looked like it would smooth the way for a Chinese approval of the NXP-Qualcomm transaction, but Trump’s new tariffs may have stalled that.

And beyond Qualcomm’s ongoing challenges in China, the company continues to work to shed jobs in an effort to reach its cost-cutting goals. As reported by the San Diego Union Tribune, Qualcomm is laying off another 61 employees in San Diego and 241 in North Carolina. Those figures are in addition to the 1,231 employees affected in San Diego and 269 workers in Santa Clara in April, and it brings Qualcomm’s total layoffs past the 1,800 mark.

Furthermore, Qualcomm’s lawyers continue to deal with Apple’s legal attempts to sidestep payments to the company for patents. As noted by Bloomberg, Apple is working to persuade a judge to allow iPhones with Intel chips into the country even if they may infringe on a Qualcomm patent for power savings.

Interestingly, that legal case before the U.S. ITC is also centering on 5G technology, and whether 5G iPhones with Intel chips should be allowed into the U.S. in order to aid the country’s race to stay ahead of China in the 5G sector.

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