Smartphone chip giant Qualcomm cuts 2.5% of its workforce

The year 2023 was a tough one for the big names in tech, as X (the former Twitter), Amazon, Google, Microsoft, and Meta all had to let go of tens of thousands of employees. Qualcomm, a leading maker of smartphone chips, has also joined the list of companies that are downsizing.

According to CNBC, Qualcomm is laying off 1,258 workers from its offices in San Diego and Santa Clara, which make up about 2.5 percent of its global workforce. Most of the affected employees are engineers. The layoffs will take place around December 13 and are part of the company’s efforts to cope with “the continued uncertainty in the macroeconomic and demand environment”, which means that the demand for its main product is not as high as expected.

The chip industry has been facing various production and supply chain issues for a long time, which have impacted Qualcomm’s operations. The company is planning to restructure its business to focus on different aspects of the chip industry. These changes are expected to be mostly done by the first half of fiscal 2024.

Qualcomm expects its revenue to drop by about 19% in the current fiscal year. Its outlook for the next year is also bleak, as analyst Ming-Chi Kuo predicts that its chip shipments to China will be 50 million units lower than this year, with a further decline.

Qualcomm also faces competition from Samsung and Apple, who are developing their own chips. Samsung is likely to use its own Exynos 2400 chip on some of its Galaxy S24 series phones next year, instead of Qualcomm’s Snapdragon 8 Gen 3. Apple plans to replace Qualcomm’s 5G modem chip with its own by 2025.

Qualcomm’s New Snapdragon 7s Gen 2 Mobile Platform: What You Need to Know

Qualcomm announces Snapdragon X series, a new generation of PC chips with AI and 5G capabilities