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Out of the 1,258 job cuts, more than 750 positions are from different levels of Qualcomm’s engineering ranks. The rest of the reductions cover a broad range of roles such as internal technical staff and accounting.
American largest chipmaker Qualcomm Inc (NASDAQ: QCOM) will lay off about 1258 employees in its California unit. According to a filing with the California Employment Development Department, as many as 1,064 of its San Diego employees and 194 of its Santa Clara employees will be subject to the reduction that will take effect from December 13.
When reached for a comment on the news, Qualcomm cited “uncertainty in the macroeconomic and demand environment” as a reason behind the need to restructure its headcount.
Qualcomm stated:
“While we are in the process of developing our plans, we currently expect these actions to consist largely of workforce reductions, and in connection with any such actions we would expect to incur significant additional restructuring charges, a substantial portion of which we expect to incur in the fourth quarter of fiscal 2023. We currently anticipate these additional actions to be substantially completed in the first half of fiscal 2024.”
Out of the 1,258 job cuts, more than 750 positions are from different levels of Qualcomm’s engineering ranks. The rest of the reductions cover a broad range of roles such as internal technical staff and accounting.
Back in August, the company was warning about the potential layoffs.
Chief Financial Officer Akash Palkhiwala said at that time:
“Given our commitment to operating discipline, we will proactively implement additional cost actions. Until we see sustained signs of improving fundamentals, our operating framework does not assume an immediate recovery.”
Qualcomm is likely to see its revenue for the fourth quarter of 2023 and the full year to be down. In Q3 2023, Qualcomm reported a 23% revenue drop to $8.44 billion. For the fourth quarter, the revenue for Qualcomm is expected to be in the range of $8.1 billion to $8.9 billion. Besides, for the 2023 fiscal year, the company is expecting a 19% contraction in its revenue.
2023: Year of Layoffs
Massive layoffs have continued into 2023. As of today, the total of layoffs for 2023 based on full months to date is 240,193. The biggest cut rounds took place at the beginning of 2023. Last month, 4,632 employees were laid off. Tech giants like Amazon.com Inc (NASDAQ: AMZN), Microsoft Corporation (NASDAQ: MSFT), Meta Platforms Inc (NASDAQ: META), and Alphabet Inc (NASDAQ: GOOGL) drove the layoffs.
Among the latest big layoffs we reported about was the one announced by Meta Platforms Inc (NASDAQ: META). The company is reportedly planning to lay off employees in Reality Labs – its business and research unit that produces virtual reality (VR) and augmented reality (AR) hardware and software.
Recently, a web-based survey and reports tools provider Qualtrics announced its decision to lay off about 780 people across the company, with “several hundred roles” changing or moving locations over the next year.
Online travel and fintech company Hopper has also cut 30% of its full-time staff, or around 250 employees, in a bid to reduce its expenses.
Qualcomm earnings beat analysts’ expectations but revenue and guidance for the fourth quarter fell short of their forecast.
Qualcomm Inc (NASDAQ: QCOM) shares closed Wednesday trading at $129.27, down 2.13 percent from the day’s opening price. The losses in QCOM shares were exaggerated during the after-hours session with another drop of approximately 6.86 percent. The sudden decline was attributed to the mixed earnings results for the third quarter that ended on June 25, 2023. According to the Q3 2023 announcement, Qualcomm reported an adjusted revenue of $8.44 billion whereas analysts surveyed by Refinitiv expected the company to report $8.5 billion. Additionally, the American semiconductor and tech manufacturing company announced adjusted earnings per share of about $1.87, whereas analysts surveyed by Refinitiv expected $1.81.
Nonetheless, the company remains optimistic about a better future driven by the mainstream adoption of artificial intelligence (AI) products.
“As AI use cases proliferate to the edge, on-device AI has the potential to drive an inflection point across all our products. Qualcomm remains best positioned to lead this transition given the unmatched accelerated computing performance with the power efficiency of our platforms,” Cristiano Amon, President and CEO of Qualcomm Incorporated, noted.
Qualcomm Q3 2023 Financial Statement and Market Outlook
In Q3 2023, Qualcomm returned $1.3 billion to shareholders, including $893 million of cash dividends paid. Additionally, the company announced it used about $400 million in facilitating a 4 million share buyback program of its common stock. During the third quarter, the company announced that the best-performing sector was the automotive industry, which reported a revenue of about $434 million, up approximately 13 percent from the same time last year. Notably, the company’s handset segment reported a revenue of about $5.25 billion, down approximately 25 percent from the same time last year.
Qualcomm’s Internet of Things segment reported a revenue of about $1.48 billion, down approximately 24 percent from the same time last year.
As for the fourth quarter, the company announced that it expects earnings of between $1.80 and $2 per share on between $8.1 billion and $8.9 billion in revenue, which fell short of analysts surveyed by Refinitiv, who had an expectation of $1.91 in earnings per share on $8.7 billion in revenue.
The company highlighted that the handset is difficult to predict, especially with a slow recovery of smartphone shipments in China.
“Handset remains difficult to predict the timing of a sustained recovery and customers remain cautious with purchases,” Qualcomm finance chief Akash Palkhiwala said on an earnings call with analysts.
Meanwhile, Qualcomm shares have gained approximately 21 percent in the past three months, an indication that its long-term investors are pleased with the performance and its market outlook.
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The automobile industry is becoming an increasingly important market for chipmakers such as Qualcomm as the number of electric vehicles and cars equipped with advanced driver assistance systems (ADAS) grows.
American multination tech giant Qualcomm Inc (NASDAQ: QCOM) is looking at expanding its footprint in the automotive business through the acquisition of Autotalks, an Israeli firm that specializes in producing chips used in vehicle crash prevention technologies.
Qualcomm announced on Monday that it would include Autotalks’ solutions in its Snapdragon Digital Chassis product portfolio. Notably, the Snapdragon Digital Chassis can be used to enable in-car infotainment and cloud connectivity.
According to reports, Qualcomm stated last year that its automotive business “pipeline” has grown to $30 billion, recording an increase of more than $10 billion since a late July disclosure.
Qualcomm is a multinational technological business that creates semiconductors, software, and other related products. In addition to its focus on mobile technologies, Qualcomm also has a significant presence in the automotive and networking industries, providing solutions for areas such as connected cars, artificial intelligence, and 5G networks.
On the other hand, Autotalks specializes in developing communication chips and software designed specifically for the automotive industry. The company’s technology is primarily used in vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication systems that allow cars to communicate with each other and with roadside infrastructure in real time.
Ultimately, this acquisition would allow Qualcomm to provide a broader choice of solutions to automakers and boost its competitiveness in the expanding market for connected and autonomous vehicles.
“We have been investing in V2X research, development and deployment since 2017 and believe that as the automotive market matures, a standalone V2X safety architecture will be needed for enhanced road user safety, as well as smart transportation systems,” said Nakul Duggal, senior vice president & GM, automotive, Qualcomm Technologies, Inc. “We share Autotalks’ decades-long experience and commitment to build V2X technologies and products with a focus on solving real-world road user safety challenges,” added he.
Qualcomm Autotalks Acquisition: New Focus for Chip Makers
The automobile industry is becoming an increasingly important market for chipmakers such as Qualcomm as the number of electric vehicles and cars equipped with advanced driver assistance systems (ADAS) grows.
Markedly, these systems rely significantly on electronic components such as semiconductors and microchips, which power sensors, and cameras in the vehicle. As a result, automakers are investing more in electronic and digital technology to remain competitive and fulfill changing customer demands, resulting in an increase in chip demand.
Additionally, the rise of electric and self-driving vehicles has opened up new opportunities for chipmakers to deliver solutions in important areas like battery management, power electronics, and connectivity.
According to forecasts, the industry is expected to grow more in the coming years as the trend toward electrification and automation accelerates. This projected growth has been cited as yet another positive point in the acquisition deal between Qualcomm and Autotalks.
Qualcomm shares pared off some losses following the announcement, they are down 0.13% in the pre-market to $108.64
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.