Chip giant Qualcomm (NASDAQ:QCOM) is planning a small number of layoffs, but the precise number is not known, according to a GigaOM report.
The report, which cited unnamed sources, said that Qualcomm has made cuts to its middle management ranks and is planning more layoffs across the board in order to cut expenses. The job cuts have been going on for past few days, the report said.
It is unclear what divisions might be affected, but the report said Qualcomm has cut several vice-president level executives and others have been demoted. The report added that one division saw nearly 100 jobs cut, though the number of total cuts is still not final. More may be coming, the report added.
A Qualcomm spokesperson declined to comment.
According to the San Diego Union-Tribune, Qualcomm has not filed Worker Adjustment and Retraining Notification Act (WARN) paperwork with officials in California, where the company is based, which is required for a layoff of 50 or more employees within a 30-day period. Qualcomm has around 31,000 employees worldwide, so a few hundred job cuts, if that is what is being contemplated, would not put a major dent in its workforce.
Qualcomm notched significant increases in earnings and sales for its last fiscal quarter, but warned that its growth rate would slow next year due to increases in the sale of less expensive phones. "In fiscal 2014 we are facing some mix and demand factors which we currently expect will moderate our QCT growth," Qualcomm CEO Paul Jacobs said during the company's earnings conference call with investors, according to a Morningstar transcript of the event. "In light of this we are taking near-term actions company-wide to prioritize investments, stay focused on growth but also control expenses in order to deliver operating profit growth in excess of revenue growth."
Qualcomm has been facing stiffer competition in emerging markets from the likes of MediaTek and Broadcom, and analysts and investors have said that Qualcomm will likely turn to Asia for continued growth. However, sales of lower-cost smartphones are higher there than in Western markets, which could cut into Qualcomm's revenues and margins.
- see this GigaOM article
- see this San Diego Union-Tribune article
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