‘Strategic Realignment Plan’ included within third quarter results
Qualcomm is making major job cuts as part of plans to cut costs and refocus its business.
The US chipmaker‘s ‘Strategic Realignment Plan’ was detailed in third quarter results and will see the company reduce costs by $1.4 billion (£900m) and 4,500 workers will lose their jobs before the end of 2016.
There is no news yet on which divisions of the company will be affected, but around 15 percent of the total workforce may be at risk.
“We are making fundamental changes to position Qualcomm for improved execution, financial and operating performance,” said Qualcomm CEO Steve Mollenkopf.
“We are right-sizing our cost structure and focusing our investments around the highest return opportunities while reaffirming our intent to return significant capital to stockholders and refreshing our Board of Directors. Importantly, our Strategic Realignment Plan is designed to drive meaningful change in the near term – without jeopardizing our ability to retain and build upon our technology leadership position and create long-term value for our stockholders.”
In its results, Qualcomm announced revenues of $5.8 billion (£3.7bn), 15 percent down on both the previous quarter and the same period last year.
This is despite the number of MSM chipsets sold by the company remaining static compared to last year at 225 million units, although this was a three percent drop from the previous quarter.
Overall, Qualcomm recorded $60.4 billion (£38.7bn) worth of device sales, four percent up from the same period in 2014 but down 20 percent from Q2 2015.
The San Diego-based company, which provides hardware for many of the world’s leading smartphone and tablet manufacturers, has finally caved to pressure to restructure from one of its major shareholders.
Investor Jana Partners has been calling for a break-up of Qualcomm’s chipmaking business away from its more lucrative patent-licensing business, and has been rewarded for this pressure with two spots on Qualcomm’s board.
“The changes we are announcing today are designed to enable us to right-size our cost structure and reposition Qualcomm for improved financial and operating performance,” said Mollenkopf. “We will continue to invest to build upon our technology leadership position and capitalize on the significant long-term opportunities before us in order to create sustainable long-term value for stockholders.”
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