Are there Qualcomm layoffs? The US chip manufacturer Qualcomm announced to start group-wide layoffs as part of cost-cutting measures.
It is estimated that this company move has impacted nearly 5 percent of its workforce. It came into action due to falling sales and a sector-wide slowdown. Those aware of this situation stated, “The company’s decision impacted most of the tech giant’s mobile division.”
They added, “Qualcomm’s mobile division would eliminate nearly 20 percent of its workers.”
The company planned to cut 5 percent of its workforce, which means 2,550 workers are affected. On May 3, 2023, the company’s quarterly results were scheduled, and the announcement was made.
It is observed that the majority of job cuts were from Qualcomm’s mobile division. Approximately 20 percent of workers belonging to that division would be laid off. Before declining its workforce, the company observed the current market situation. Later, it decided to realign and adjust the company accordingly. Although, Qualcomm itself did not reveal the reports.
The global chip-making company, Qualcomm, started to lay off employees. The decision of the company affects full-time and temporary workers. The company is downsizing its business.
As we all know, no one wants to downsize, but conditions may arise which lead them to make this decision. Similarly, Qualcomm wanted to keep its size the same but decided to lay off employees due to a cost-reduction plan implemented by the company.
It affected workers and reported that up to 1,500 workers were affected in California alone.
Additionally, Qualcomm was planning to acquire NXP. At the same time, it struggled to cut costs by 1 billion US dollars, and the acquisition deal remains unsettled.
According to the company, it is noted that the layoff decision is a crucial part of a wider cost-cutting strategy. It mainly focuses on the company’s growth and success in the long run.
Furthermore, those affected by the company’s mass layoff will be provided severance packages. The company believed the severance package might help them and reduce the impact of the layoff on those employees, the community, and their families.
Later, the company representatives stated, “Initially, we planned to reduce non-headcount expenses, but it was insufficient for the company’s long-term growth and success alone. So, we concluded that a reduction in the workforce is required to support the decision in the long run. The decision of the company has benefited all of our stakeholders.”
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Qualcomm is an American multinational corporation founded by Irwin M. Jacobs and other co-founders in 1985. It is headquartered in San Diego, California. Later, it moved to Delaware. It manufactures software, semiconductors, and services that relate to wireless technology.
Its patents were critical to the 4G, CDMA2000, WCDMA, TD-SCDMA, and 5G mobile communications standards.
When the two-way mobile digital satellite communication systems (Omnitracs) were sold, at that time, the early research into CDMA wireless cell phone technology was funded after having a long discussion in the wireless tech industry. Qualcomm’s CDMA patents were incorporated with the 2G standard. Later, the company indulged in a series of legal disputes about pricing for licensing patents needed by the 2G standard.
Then, Qualcomm decided to expand its business and started to sell semiconductor products in a fabless manufacturing model. Besides, Qualcomm created semiconductor components or software for several purposes, such as:
Laptops, wi-fi, watches, vehicles, smartphones, and several other devices.
Qualcomm creates semiconductor designs, development tools and services, patented intellectual property, software, and other services. But, the company needs to develop physical products like infrastructure equipment and phones.
The company generates revenues from licensing fees for its sales of semiconductor products and intellectual property. The revenue is also generated from other wireless services, hardware, or software.
What are the divisions of Qualcomm?
There are three divisions of Qualcomm which are as follows:
Qualcomm CDMA Technologies (QCT):
The company generates 80 percent of its revenue from CDMA wireless products.
Qualcomm Technology Licensing (QTL):
It generates more than 19 percent of the company’s revenue from licensing.
Qualcomm Strategic Initiatives (QSI):
It generates less than 1 percent of revenue from QSI. Investing in other big technology companies.
The company’s main motive is to provide semiconductor products for wireless communications and transfers data in handy devices.
According to Analytics, “It is estimated the company has over 50 percent of market share for baseband processors. On the other hand, 39 percent of the market share is for smartphone application processors. Moreover, 18 percent of market shares for tablets application processors.”
Qualcomm is headquartered in San Diego. It is the largest public company. The Qualcomm Foundation is the benevolent arm of the company.
Later, the company voluntarily adopted a policy of revealing its political contributions in January 2013, when it was alleged with a lawsuit. When disclosing the policy, Qualcomm was appreciated by transparency advocates.
Moreover, the chip manufacturer Qualcomm generated a 65 percent market share for LTE baseband. It is estimated that the company anticipated to earn 20 US dollars for every smartphone sold. To use the company’s patents, Qualcomm offers licenses, and most of them are difficult to the TD-SCDMA, WCDMA, and CDMA2000 wireless standards.
Why Is Qualcomm Laying Off Employees?
One of the major reasons for job reductions was the company faced a heavy drop in sales, and the entire technology department was greatly impacted.
In a nutshell, according to reports, it is noted that the company was struggling with challenges as it dropped smartphone sales.
The president and the CEO of the company named, Cristiano Renno Amon, explained during the first quarter earning call in February 2023, “Due to a heavy drop in demand in the handset industry, Qualcomm predicted that high channel inventory levels will remain in the first half of this year.”
It is reported that the company was facing challenges and needed help to meet the expected demand and high inventory levels across the numerous IoT end industries.
Qualcomm and several other tech companies announced plans to cut jobs globally. Before making the layoff move, the company has been assessing the situation and its strength.
Amon added, “We are implementing more spending reductions and streamlining operations after predicting the current macroeconomic and demand environment without further affecting the necessary growth and diversification opportunities.” He said, “We are committed to handling everything actively and also consistently to operating expenses as expected during our last earnings call.”
Over the last quarter, the company has faced challenges with declining smartphone sales. Qualcomm planned to reduce its workforce this year to adjust to its resources. If we observe last year’s data, Qualcomm’s revenue and net income decreased by 12 and 34 percent, respectively.
The company has been directly impacted and decided to downsize by cutting the jobs.
What Are The Benefits Of Working At Qualcomm?
Here you can check what benefits the chip manufacturing giant Qualcomm offers to its employees:
- Insurance, Health, and Wellness
- Home Benefits such as remote work, immigration assistance, etc.
- Financial & Retirement
- Perks and Discount
- Transportation allowance
- Donation Match
- Volunteer Time Off
The company funded premiums for you and your eligible dependents. If an employee contributes up to 1,500 US dollars, then there is a 100 percent match on the employee’s contribution.
- It is reported that an employee got a 100 percent match on the first 1,500 US dollars.
- A 50 percent match on another 1,500 US dollars.
- A 33 percent match on the next 7,500 US dollars.
- A 10 percent match on the rest.
- A 100 percent vest after two years
- A 50 percent vest after a year.
Is Qualcomm A Good Company To Work For?
According to Qualcomm employees’ reviews, the overall company has been rated 4.2 out of 5, including:
- The work-life balance is rated 3.8 out of 5
- The work culture at Qualcomm is rated 3.9 out of 5
- Job security and advancement are rated 4.1 out of 5
- Management is rated 3.8. So, the overall rating of Qualcomm is 4.2.
Altogether, it is a good company to work in… 98 percent of the employees would recommend working at Qualcomm.
The pros of working at the company are:
- The great company culture.
- Growth opportunities.
- The entire team.
- The person you work for.
Everything is just perfect that one can opt for.
If we talk about its cons, the employees have observed and mentioned no cons so far.
Qualcomm Inc. Forecast
Stock Price Forecast:
The analysts provide yearly price forecasts for the company. It says Qualcomm Inc has a median target of 135.00 with a high and low estimate, i.e., 152.00 and 95.00, respectively. It is estimated that the median estimate indicates an increment of 9.20 percent from the last price of 123.63.
Among 30 polled investment analysts is to buy stock in the company. The current consensus represents that the rating has been constant since June, when it was unchanged from a buy rating.
Who Are The Top Competitors Of Qualcomm?
The top competitors of Qualcomm (QCOM) are as follows:
- Synaptics (San Jose, California)
- Hi, Silicon (Hawaii)
- Infineon Technology (Germany)
- MediaTek (Taiwan)
- Cirrus Logic (America)
- Nvidia Corporation (America)
- Advanced Micro Devices, AMD (America)
- Intel Corporation (America)
- Broadcom Corporation (America)
- Taiwan Semiconductor Manufacturing Company
- Applied Materials
Although Qualcomm is one of the most popular companies in the semiconductor manufacturers market.
It has high-profile employees and clients. Due to this, the company competes with high-profile brands such as Apple, Infineon, etc. Above, we have mentioned the top competitors of Qualcomm. Moreover, Qualcomm is among the top ten companies in the semiconductor industry in terms of market share and revenues.
Final Thought On Qualcomm Layoffs
For more than two decades, Qualcomm has been the leader in 3G, 4G, and next-generation wireless technology innovations worldwide. The company is committed to offering millions of devices to connect like never before.
According to data analysis firm International Data Corporation, it is reported that, in 2022, the smartphone industry will be impacted globally, and shipments have fallen by 11.3 percent.
It was a wake-up call to the smartphone manufacturers that caused them to take a cautious approach.
Furthermore, the research showed that smartphone shipments would decrease by 1.1 percent in 2023.
All these factors have forced the company to make the layoff decision. As well as the company tries to streamline its operations and decrease costs to direct the ongoing tech slowdown.