Chip maker Qualcomm Inc. to slash jobs under restructuring plan - Los Angeles Times
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Chip maker Qualcomm Inc. to slash jobs under restructuring plan

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Qualcomm Inc., responding to pressure from an activist investor, said Wednesday it expects to cut thousands of jobs under a restructuring plan to slash annual spending by $1.4 billion.

San Diego-based Qualcomm is the nation’s leading maker of so-called chipsets, or collections of integrated circuits, used in mobile phones. It also earns substantial profit from licensing its technology.

The company’s plan includes a 15% cut in its full-time chip-making workforce along with “significant reductions in our temporary workforce” and certain office closures, Qualcomm Chief Executive Steve Mollenkopf told analysts.

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He did not specify the exact number of jobs targeted, and Qualcomm doesn’t break out its employee count by division. But Qualcomm employs about 31,000 full-time and temporary employees, so the cuts could amount to 4,000 employees or more.

Qualcomm unveiled the plans while reporting a 47% drop in its fiscal third-quarter profit. The company has been struggling with slowing sales growth, lower-priced competition and reduced earnings. Its stock is down about 15% this year.

The company stopped short of proposing that its chip-making and licensing lines be separated into stand-alone businesses. But Qualcomm said its “strategic realignment plan” would include reviewing such a breakup idea.

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Qualcomm has been under pressure to boost shareholder returns from activist investor Jana Partners, which owns nearly $2 billion of Qualcomm stock.

In the quarter ended June 28, Qualcomm reported net income of $1.18 billion, or 73 cents a share, down from $2.24 billion, or $1.31, a year earlier. Revenue fell to $5.83 billion from $6.81 billion a year earlier.

After excluding share-based compensation and other adjustments, Qualcomm’s per-share profit was 99 cents, higher than the 95 cents expected by analysts polled by FactSet Research.

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