According to foreign media Business Today, citing knowledgeable sources, reported that chip maker Qualcomm will announce global layoffs of 5% in its quarterly earnings report on May 3, a decision due to the decline in global smartphone sales and the technology industry downturn.
Qualcomm’s mobile division will be the hardest hit by layoffs, with about 20 percent of the division’s workforce to be cut, people familiar with the matter said. Qualcomm’s mobile division is mainly responsible for producing smartphone chips, one of the company’s main sources of revenue.
Business Today asked Qualcomm for confirmation and received a statement from company CEO Cristiano Amon during the February earnings call. Given the current macroeconomic and demand environment, we are implementing further expense reductions and streamlining our business, without losing sight of significant future growth and diversification opportunities,” Amon said. This is consistent with our commitment to aggressively manage operating expenses, as expressed on our last earnings call. Combined with the actions we have already taken in the quarter, we expect non-GAAP operating expenses to be approximately 5 percent lower than they were at the end of fiscal ’22.”
Another person familiar with the matter noted that Qualcomm is facing difficulties from declining smartphone sales. The person said, “The decline in smartphone sales over the past few quarters has impacted Qualcomm, and the company is realigning its resources.”
As per the publicly available information and learned that Qualcomm’s net profit fell 34 percent year-over-year in the quarter that ended December 2022, while revenue also fell 12 percent year-over-year. The results were attributed to a macroeconomic slowdown and declining demand for mobile handsets. The decline in smartphone sales directly affected Qualcomm, as chip manufacturing is one of its main sources of revenue.
In January, IDC reported that global smartphone shipments fell by 11.3 percent in 2022, leading smartphone makers to take a cautious approach. In addition in its latest report, the research firm noted that global smartphone shipments are expected to decline a further 1.1 percent in 2023.
