Qualcomm To Lay Off Thousands This Week
As the smartphone market starts to get more and more mature, top mobile chipset makers such as Qualcomm are going to have a much harder time maintaining their position as the supreme leader of the SoC ladder. According to the latest report, the company is going to begin its restructuring phase, and in order to do so, the tech firm is going to start cutting jobs. At this current time, there are around 30,000 employees working for Qualcomm.
Qualcomm Expects To Cut More Than 10 Percent Of Its Total Workforce
According to a report published by Forbes, Qualcomm plans to lay off more than 10 percent of its total workforce. The source states that the company plans on announcing these cuts during its upcoming third quarter earnings report this Wednesday. One primary reason why the company is making this drastic move is because profits are harder to come.
Ever since the Snapdragon 810 overheating saga, which has now been rumored to plague the company’s Snapdragon 820 as well, Qualcomm lost out on a monumental financial deal with Samsung, which instead incorporated its 14 nm FinFET Exynos 7420 in its popular Galaxy S6 family. Additionally, lower priced devices, (which feature chipsets from MediaTek and Spreadtrum) are increasing more and more in regions like China and India.
While Qualcomm’s high-end SoC will still be present in nearly every high-end Android smartphone, companies like MediaTek and Spreadtrum have started to give the company a run for its money. In order to make sure that it is able to maintain its profits, Qualcomm has partnered with Chinese firm Allwinner to start rolling out entry-level 4G capable devices in China, where affordable handsets are given more preference.
Qualcomm might be ahead of its rivals in cellular modem technology, but once again, MediaTek has spent a great deal of capital in an attempt to dethrone the giant. Not only this, but Qualcomm will also be targeting the enterprise business, with its server based processors. As of right now, the only information we have is that the company is building an ARM based 64 bit server processor that has been codenamed Hydra.
In Qualcomm’s second quarter earnings report in April, the company had lowered its revenue guidance for 2015 to the range of $25 billion to $27 billion, compared to a previous outlook that was in the range $26.3 billion to $28.0 billion. As if things weren’t bad enough, Qualcomm will also be expecting to make 10-20 percent less revenue during Q3, 2015 as compared to Q3, 2014.
Hedge fund Jana Partners is pressuring Qualcomm to split up its chip business from its highly profitable licensing business. The purpose behind this is that splitting the two entities would aid Qualcomm in realizing the actual value of its chip business. The company will be conducting a strategic review and at that time, the board will be contemplating on whether to keep the company running as it is, or split it in two.
Like always, we will be updating you on the latest actions that Qualcomm decides to take.
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