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Qualcomm unveils cuts in jobs, spending
[SAN FRANCISCO] Qualcomm, the world's biggest manufacturer of mobile semiconductors, said Wednesday it was slashing its work force by 15 per cent as part of a "right-sizing" of its cost structure.
The California company also said it was making other cost-saving moves, following several months of pressure from an activist shareholder.
The job cuts would represent around 15 per cent of its workforce of some 31,000.
The moves are part of a "strategic realignment plan designed to improve execution, enhance financial performance and drive profitable growth." The plan calls for "aggressively right-sizing the cost structure by eliminating approximately US$1.4 billion in spending, including an approximately US$300 million reduction in annual share-based compensation grants," according to a statement.
While Qualcomm has become a star in the new mobile economy, some have complained it has not returned enough to shareholders.
Chief executive Steve Mollenkopf said the company was "making fundamental changes to position Qualcomm for improved execution, financial and operating performance." The company said it was also reviewing "financial and structural alternatives available to create stockholder value" including a possible splitting up of the company.
In April, the investment firm Jana Partners had called for a breakup of the highly profitable patent division from the unit which manufactures chips. Jana had taken a six percent stake in Qualcomm.
As part of the new plan, Qualcomm said it agreed to name two members of Jana to its board and add a third that would be jointly selected by the firm and Jana.
Qualcomm said separately it posted a profit of US$1.2 billion in the past quarter, down 47 per cent from a year ago, while revenues fell 14 per cent to US$5.8 billion.