Qualcomm (NASDAQ:QCOM) is cutting around 600 jobs globally as part of a shift in the chipset giant's business, according to a CNET report. The cuts represent only around 2 percent of the company's total workforce.
A Qualcomm spokesperson confirmed to CNET that just under 300 employees would be laid off from the company's operations in California, while a "similar number" of international employees will also be let go, the person said.
As of the end of September, Qualcomm had about 31,300 full-time, part-time and temporary employees, which was up about 300 from the year earlier. "We regularly evaluate our businesses to determine where efficiencies can be obtained and priorities addressed," the spokesperson said in a statement to CNET. "On occasion, that requires we adjust the size or skill mix of our work teams in order to shrink or eliminate some projects and start and grow new projects."
Some workers will be moved to other areas of the company while the rest will get severance and transition packages, the report said. However, the spokesperson declined to say which areas of Qualcomm's business would be cut or changed. At the same time, Qualcomm said the cuts are not related to regulatory investigations into the company in China, the U.S. and the European Union. The cuts are "focused on specific projects and programs and reflects current business priorities," the company said.
Since Steve Mollenkopf became CEO of the world's largest mobile chipset maker in March, Qualcomm has placed strong emphasis on getting its LTE and application processor chips into lower-end smartphones, where market growth is trending. The company has also put more emphasis on hardware and less on software, spinning off the unit that housed its Gimbal geolocation beacon technology into a separate company, for example. Although Qualcomm is still working on software-based projects, the company said last month it plans to start supplying silicon for servers, a market currently dominated by Intel and Advanced Micro Devices.
"We are engaged with customers," Mollenkopf said at the company's annual investor conference, according to the Wall Street Journal. "It will take us a while to build this business, but we think it is an interesting opportunity going forward."
In addition to an ongoing investigation into its licensing business in China, Qualcomm disclosed last month it is facing probes from the Federal Trade Commission and European Commission. Qualcomm said it expects its total revenue to grow between 8 percent and 10 percent annually over the next five years, a lower level that is has forecasted in the past. In addition to its China difficulties, Qualcomm also faces lower payments from OEMs and average selling prices of smartphones continue to drop.
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