Qualcomm Plans Global Layoffs in November
According to a Reuters report, Qualcomm (NASDAQ: QCOM) plans to conduct performance-based layoffs worldwide, with affected employees expected to be notified beginning in November. Facing weak consumer electronics demand and pressure on its smartphone chip business, the semiconductor company is adjusting its workforce while accelerating its expansion into artificial intelligence (AI) data centers and other non-smartphone markets.
According to an internal memo obtained by Reuters, Qualcomm CEO Cristiano Amon informed employees on Monday, October 19, that the company would reduce its workforce following its annual performance review. The move aims to strengthen the company's performance-driven culture and address continued underperformance. The memo did not disclose the number of employees affected, and Reuters said it could not immediately verify the scale of the planned layoffs. Qualcomm had not responded to a request for comment at the time of reporting.
As of September last year, Qualcomm employed approximately 52,000 people worldwide, most of whom were full-time employees. The company's fiscal year typically ends in late September. Amon said workforce decisions would take into account business priorities, organizational requirements, and employees' skills and expertise.
He added that as Qualcomm expands its business, its workforce requirements and the skills needed across different functions are also evolving. Ensuring that employees are assigned to the right roles is essential to making the most of their capabilities and supporting the company's continued growth.
Qualcomm is one of the world's largest suppliers of smartphone chips. However, the company has faced challenges this year amid sluggish consumer electronics sales, while rising memory prices have put additional pressure on demand in key markets. Qualcomm's stock has gained approximately 1.5% this year, significantly underperforming the S&P 500, which has risen more than 12%, and the Philadelphia Semiconductor Index, which has advanced nearly 60%. The company's shares fell about 1% in premarket trading on Tuesday, October 20.
When Qualcomm reported its financial results in late July, it forecast quarterly earnings below market expectations and warned that revenue from Apple products would decline faster than previously anticipated. At the same time, the company expects growth in data centers and other non-smartphone businesses to offset the anticipated revenue decline by fiscal 2027, with new business segments potentially generating more revenue than the amount lost.
As Qualcomm strengthens its position in the rapidly growing AI data center market, it expects most of its chip sales to come from businesses outside the smartphone segment by fiscal 2027. This transition would mark a significant shift in its long-standing reliance on the smartphone market and reflects the company's broader strategy to diversify its semiconductor business and capture new growth opportunities in AI infrastructure.
