Processors

As chip competition heats up, Qualcomm starts cutting jobs

posted by Victor H. / Nov 22, 2013, 7:48 AM

As chip competition heats up, Qualcomm starts cutting jobs

Qualcomm has started cutting jobs in its mid-management structure to reduce expenses amidst increased competition, according to GigaOm.

With pressure from Chinese chip makers like MediaTek pusning prices for chips down and the industry’s biggest clients Apple and Samsung having started making their own chips, San Diego-based Qualcomm might be forced to tighten the belts. The company reported worse-than-expected financial results last quarter when it closed the fiscal year, and it gave a weaker outlook for the next quarter.

“In fiscal 2014 we are facing some mix and demand factors which we currently expect will moderate our QCT growth. In light of this we are taking near-term actions company-wide to prioritize investments, stay focused on growth but also control expenses in order to deliver operating profit growth in excess of revenue growth,” Qualcomm chief executive Paul Jacobs said in a conference call.

The layoffs are currently happening in the company and executives as high as vice presidents have allegedly been let go and others have been demoted. One Qualcomm division has allegedly seen 100 job cuts.

With 31 000 employees, though, others within the chip maker are saying the reshuffle is nothing extraordinary and fit in an overall attempt to cut costs.

source: GigaOm

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9 Comments

1. itsdeepak4u2000

Posts: 3718; Member since: Nov 03, 2012

But Qualcomm is doing good and now-a-days in most of the phones, this is not good.

posted on Nov 22, 2013, 8:06 AM 0

4. Finalflash

Posts: 4063; Member since: Jul 23, 2013

What're you talking about, this is great. They are cutting managerial jobs, the engineers are still in place. Once in a while you need to streamline your upper tier because that bureaucracy is what hurts the engineers below.

posted on Nov 22, 2013, 8:37 AM 1

10. Augustine

Posts: 1043; Member since: Sep 28, 2013

This is not correct. Mostly engineers were shown the door.

posted on Dec 03, 2013, 5:57 PM 0

2. Shatter

Posts: 2036; Member since: May 29, 2013

So expect lower performance gains and less new features in new chips?

3. speckledapple

Posts: 902; Member since: Sep 29, 2011

Very surprising considering how well they are doing in the space. Practically everyone has their chips.

posted on Nov 22, 2013, 8:17 AM 0

5. rallyguy

Posts: 620; Member since: Mar 13, 2012

Yes, just as with any company, you have to plan for the future. The chips in our phones are old business. This is a tech company which relies on new innovation and new products. Remember the term that basically says as soon as a tech product hits the market it is obsolete?

posted on Nov 22, 2013, 9:49 AM 0

8. Augustine

Actually, QCOM is a company that relies on royalties. Over half of its profits come from the licensing division.

posted on Nov 22, 2013, 12:04 PM 0

6. livyatan

Posts: 867; Member since: Jun 19, 2013

The answer to this seems obvious to me - next year, Qualcomm will have to count out Samsung as a customer of their high end chips due to switch to Exynos processors for the Galaxy S5 and Note 3. Also, Tegra 5 should have far more impact and customers than Tegra 4. This year was a blockbuster and hardly repeatable period for Qualcomm because they had basically no competition. 2014 will see a bit different story and Qualcomm is aware of that

posted on Nov 22, 2013, 11:47 AM 0

9. galanoth

Posts: 428; Member since: Nov 26, 2011

Qualcomm owned 2013 in the high end mobile space. But everyone will start making their own SOC in the coming years. Apple has A series, Samsung has Exynos, LG has rumored Odin. HTC has always used Qualcomm but their business is small compared to the others.