Qualcomm, the semiconductor manufacturer, has announced workforce reductions, resulting in the termination of 1258 employees in California. This announcement, reported by Bloomberg, was conveyed through a statement sent to the California Employment Development Department.
This reduction represents a 2.5% cut of Qualcomm's global workforce, which currently stands at 50,000 employees. More than 750 of those laid off held engineering positions, including mid-level managers. The remaining affected employees are distributed across various departments, occupying technical and specialized roles in legal and accounting aspects.
It remains unclear whether Qualcomm will conduct layoffs in other locations, as California is the only U.S. state requiring companies to notify such workforce reduction operations. This practice is not observed in other countries either. According to the company, the layoffs are set to commence in mid-December.
Qualcomm's decision to downsize its workforce does not come as a complete surprise. In August of last year, during a meeting with financial analysts, Qualcomm's CFO, Akash Palkhiwala, indicated proactive measures to reduce expenses in light of declining revenues. They also noted that most of these measures would result in a reduction of their workforce. Therefore, they expressed hope in having greater capacity for investments in their core areas of growth, alongside exploring opportunities to diversify their business.
Qualcomm still derives the majority of its revenue from smartphone chip sales, an area experiencing a sharp decline in sales. Everything suggests that the sector's situation will not significantly improve in the short term. Consequently, companies specializing in manufacturing its components, like Qualcomm, are grappling with the repercussions.
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