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Amidst economic hurdles, 2023 has been the year where almost every company has laid off a significant portion of their workflow. Now, in a recent development, Qualcomm has announced significant job cuts as it aims to reduce expenses in light of a persistent slowdown in smartphone sales.
As per the Worker Adjustment and Retraining Notification Act (WARN) paperwork, the company has not only eliminated 415 positions at its San Diego headquarters but also let go of 84 employees at the Bay Area office. Amongst the layoffs, the engineering department was the most affected, with approximately 300 positions eliminated, as indicated by the WARN notice.
Reasoning for the layoffs
While smartphone and modem sales in the US have remained consistent, soft smartphone sales, particularly in China, have had a substantial impact on Qualcomm’s growth this year. During the latest earnings conference call in May, Qualcomm’s CEO, Cristiano Amon, acknowledged the challenges and stated, “We are actively managing operating expenses and will continue to evaluate additional opportunities to drive greater operating efficiencies without losing sight of the automotive and Internet of Things growth opportunities ahead.”
However, it is important to note that this new round of job cuts comes in addition to two smaller layoffs that Qualcomm announced in December and March, resulting in a total of 232 workers being removed from the San Diego workforce.
Venturing into new areas
Although Qualcomm’s revenue has been slowing amidst economic hurdles, the company has been working on expanding its business, particularly in the automotive industry, where they are focusing on in-vehicle connectivity, digital dashboard/infotainment systems, and autonomous driving technologies. Additionally, the company is also ramping up its efforts to supply technologies for various industries, including in-cabin cameras for trucks, drones, retail and warehouse scanners, and robotics.
“We are on track to meet our commitment of a 5% reduction in non-GAAP operating expenses relative to our fiscal ’22 exit rate. This includes a further reduction of spending in handsets to fund diversification investments,” said Akash Palkhiwala, chief financial officer, at a recent earnings call.
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