Qualcomm plans to cut roughly 15 percent of its workforce, about 4,700 workers, the San Diego chip maker said Wednesday as it struggles to return to growth in a maturing smartphone market.
Qualcomm will trim $1.4 billion from its $7.3 billion in annual expenses once all the cuts are made.
Other cost cutting includes “streamlining the engineering organization, reducing the number of offices and increasing the mix of resources in lower-cost regions,” the company said. The cost savings are expected to be spread out over the next year or so.
“We are going to do some changes to how we are doing things and where we are putting employees,” said Chief Executive Steve Mollenkopf in a conference call with Wall Street analysts.
“I think you are looking at a case where we have had some significant growth,” he continued. “We are now trying to react to what is happening in the industry and get ahead of it. I think we will be healthier as a result.”
The belt tightening includes a $300 million reduction in annual share-based compensation. In the past, Qualcomm has granted restricted stock to not only executives but also to many of its employees.
Qualcomm also will review its corporate structure. Activist investor Jana Partners has pressured Qualcomm to consider splitting its chip business – which produces most of its revenue – from its wireless technology licensing arm – which generates most of its profits.
http://www.sandiegouniontribune.com/news/2015/jul/22/Qualcomm-jana-layoffs-smartphones-samsung/