Qualcomm cutting 15% of its workforce in effort to save $1.4 billion
Qualcomm announced today plans to slash its workforce by 15%, aiming to save around $1.4 billion. The layoffs will be joined by a reduction in annual share compensation. The new strategic realignment or re-sizing plan comes in the wake of the company’s announcement of its third quarter earnings, which dropped nearly 50%.
Qualcomm CEO Steve Mollenkopf commented on the changes coming to the company:
“We are making fundamental changes to position Qualcomm for improved execution, financial and operating performance. 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 and leadership position to create long-term value for our stockholders.”
Under pressure from JANA Partners, which purchased a $2 billion stake in Qualcomm last year, the company announced that structural changes are on the way. Mark McLaughlin of Palo Alto Networks and Tony Vinciquerra of TPG have been added to the Board of Directors. A third person, who must be approved by JANA Partners, will be added in the near future. JANA Partners is continuing to hint that splitting Qualcomm’s units, specifically design and patent-licensing, may be the next step to prevent further loss.
There are more than 31,000 employees, both permanent and temporary, working for Qualcomm; therefore, between 4,500 and 5,000 people are expected to be let go.
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