QUALCOMM, the largest maker of chips that run smartphones, is reducing its workforce to cope with lacklustre demand for its main product.

The company is eliminating 1,258 positions in San Diego and Santa Clara, California, according to submissions to the California Employment Development Department. A Qualcomm representative declined to comment on the overall size of the reductions to its 50,000 workforce.

More than 750 of the positions being eliminated are from Qualcomm’s engineering ranks, including at levels from director down to technician. The rest of the cuts will come from a broad range of roles such as internal technical staff and accounting.

The job reductions will begin about mid-December, Qualcomm said in the notifications. The San Diego-based company is required to make the filings under California rules. Those obligations on announcements of job cuts do not apply to the company’s other locations.

Chief financial officer Akash Palkhiwala told analysts in August that Qualcomm would “proactively implement additional cost actions”.

“We had previously communicated we would evaluate additional cost actions as the environment continues to evolve,” he said on a conference call. “Until we see sustained signs of improving fundamentals, our operating framework does not assume an immediate recovery.”

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The company, which will report earnings next month, is on course to see revenue shrink by about 19 per cent in the current fiscal year. While chief executive officer Cristiano Amon is trying to drive Qualcomm’s products into new areas, the company still gets the bulk of its sales from the phone market. Demand for the devices, particularly in China, has not rebounded as quickly as some had projected.

Qualcomm shares were little changed at US$111.10 at 3.05 pm in New York. The stock had gained 1 per cent this year till Wednesday’s close, lagging behind a rally of almost 40 per cent by the Philadelphia Stock Exchange Semiconductor Index. BLOOMBERG