Qualcomm to lay off 10% of workforce, may consider possibility of a breakup
Qualcomm may be preparing to lay off up to several thousand employees to cut costs as competition in the chip business heats up. In addition, it will be conducting a strategic review of its business and its chip production business may be split from the patent licensing operations.
Image source: Qualcomm
Dark days are ahead for Qualcomm, the world's largest maker of mobile chips as it faces increasing competition and falling profits.
According to The Information, Qualcomm may be laying off about 10% of its workforce this week which means up to several thousand employees could potentially lose their jobs. In addition, The Wall Street Journal also reports that the chip maker is under pressure from an activist investor to conduct a strategic review of its operations which may involve breaking up its chip business from the patent-licensing operation.
Besides having to deal with increased competition from other chip makers such as MediaTek and Samsung, Qualcomm also reported a decline in profits due to the loss of a large customer (Samsung). There is also an ongoing saga over its Snapdragon 810 chipset, which is reported to be plagued by overheating issues.
Qualcomm is also said to be considering other options such as repurchasing shares at a faster pace, cut costs to return more cash to shareholders, and bring new people to its management. The company is scheduled to release its quarterly earnings in a few hours' time when it may share more concrete plans for its future.
Sources: The Information and The Wall Street Journal via Engadget
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