Qualcomm Mulling To Lay Off Employees After Missing Estimates
Chipset-making giant Qualcomm is mulling to lay off more employees amid falling smartphone sales, macroeconomic uncertainties and risks in China.
Chipset-making giant Qualcomm is mulling to lay off more employees amid falling smartphone sales, macroeconomic uncertainties and risks in China, the media has reported. The company which has around 51,000 employees, reported disappointing sales that missed forecasts in quarterly earnings. The San Diego, California-headquartered company's third quarter (Q3) earnings for the year saw a 25 per cent decrease in sales of mobile chipsets, compared to last year, which amounted to $5.26 billion. Qualcomm's fiscal year runs from October to September. The company's net income dropped by over 50 per cent YoY in the previous quarter.
Qualcomm said its reliance on the Chinese market is risky amid China's import substitution and the US-China geopolitical tensions, said a report in Digi Times.
According to Counterpoint Research, the US smartphone shipments declined 24 per cent YoY in Q2. This is the third consecutive quarter of YoY decline in smartphone shipments, led by Android brands like Samsung, Motorola and TCL-Alcatel. However, Apple’s shipments were more resilient. As a result, Apple’s share of shipments increased YoY.
"Given the continued uncertainty in the macroeconomic and demand environment, we expect to take additional restructuring actions" read the filing.
"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."
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