Qualcomm is planning to lay off about 1,500 workers in California as part of its broader workforce reduction strategy to improve earnings by saving $1 billion for its investors. In January 2018, the company promised to increase its earnings by reducing its operating expenses. The job cuts will focus on the operations located in California, although the plan will expand to other regions in the near future, according to Bloomberg. Currently, the firm employs about 33,800 across the globe.
According to close sources to the company, the firm had tried to implement other tactics of reducing the company expenses including the evaluation of all the non-headcount expenses but eventually the decision was made to reduce its workforce so as to support its future growth and financial stability.
The company has pledged to provide severance payments to the affected workers. The current layoffs will apply to both full time and part time employees though the exact numbers in each category were not specified.
In 2015, Qualcomm laid off thousands of workers during the restructuring prompted by an activist investor and has since struggled with negative sales, which are anticipated to decline further by 3% in the 2018 fiscal year.
In addition, the company was slapped with a $1.2 billion fine in January by the EU following the allegations that the firm has violated the anti-trust laws in winning several deals with Apple.
Qualcomm was almost acquired by Broadcom Inc, but plans were frustrated by the US President Donald Trump who blocked the deal in March this year citing various national security reasons.
The smartphone-chip maker has been making every effort to resist a hostile takeover bid from its rival Broadcom until President Trump intervened to save the country from security-related risks. As a result, Qualcomm has vowed to measure up to its promises and one of its strategies is to entirely streamline its internal operations.
The company is expected to file a Worker Adjustment and Retaining Notification (WARN) notice with the state of California, which is required by the regulator for firms that plans to lay off more than 50 workers. Furthermore, Qualcomm will be required to give the affected workers a notice of 60 days before the layoffs and other severance payments and benefits.
With increasing economic crises across the world and the pressure to embrace technological innovations, most business firms are being forced to restructure their operations to reduce their expenses.