Qualcomm plans to lay off several thousand employees

According to a report form The Information, Qualcomm is getting ready to announce thousands of job cuts this week in a response to the declining smartphone prices and rising competition from Chinese manufacturers, such as MediaTek and Spreadtrum Communications.

The report cites that the layoffs could affect more than 10 percent of Qualcomm’s approximate 30,000 employees. The company will report its quarterly earnings Wednesday afternoon and it is expected to announce the cuts simultaneously. Qualcomm is indeed facing challenges as sales of high-end phones using Qualcomm chips are declining while sales of cheaper smartphones using chips from MediaTek and Spreadtrum Communications are booming in markets such as China and India. Samsung for example declined to use Qualcomm’s Snapdragon 810 processor and opted to use its own Exynos chips for its Galaxy S6 and S6 Edge smartphones, which prevented Qualcomm from selling millions of its chips in such popular smartphones.

In addition to job cuts, Qualcomm is considering a break-up. It would split apart its chip-production business from its patent licensing division, as hedge fund Jana Partners, one of Qualcomm’s largest shareholder is pressuring the company to do so. Jana has also told Qualcomm it should cut costs, repurchase shares, and reshuffle its board in a response to all the pressure it faces.

Source: The Information

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