Layoff news comes just days after ZTE embargo
SAN FRANCISCO — Qualcomm has begun laying off an unspecified number of full-time and temporary workers as part of a cost-cutting plan announced in January.
A Qualcomm spokesperson confirmed to EE Times that the workforce reductions have begun. The layoffs had been reported earlier in the day by news services including Bloomberg and Reuters.
“We first evaluated non-headcount expense reductions, but we concluded that a workforce reduction is needed to support long-term growth and success, which will ultimately benefit all our stakeholders,” the spokesperson said in an email exchange with EE Times.
Qualcomm told investors in January that it would enact a $1 billion cost reduction program. The pledge was made in a letter to investors as the company’s board of directors battled a hostile takeover attempt by Broadcom.
“A workforce reduction, such as this one, affects not only those employees who are part of the reduction, but their families, co-workers and the community. We recognize this and have offered affected employees supportive severance packages to reduce the impact of this transition on them.
News of layoffs at Qualcomm comes just a few days after the San Diego-based chip giant suffered a blow when the U.S. Commerce Dept. imposed a seven-year ban preventing Qualcomm and other U.S. chip suppliers from selling products to Chinese’s ZTE Corp. The order was issued in response to ZTE violating the terms of a deal reached last year when ZTE was caught shipping telecom equipment to Iran and North Korea, the Commerce Dept. said.
ZTE, which makes smartphones as well as telecom equipment other electronics gear, is a major Qualcomm customer. The Qualcomm spokesperson declined to say how much Qualcomm generates in revenue annually from sales to ZTE, but some industry watchers have estimated that it could be in the neighborhood of $500 million per year.
— Dylan McGrath is the editor-in-chief of EE Times.
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