Qualcomm cutting a large number of employees due to slow business, Huawei to also stop buying 4G chip

Qualcomm has started taking actions to reduce loss by cutting a large number of employees due to sluggish chip business.

The chip maker will reduce 1064 jobs in its Sand Diego facility and 194 in Santa Clara. These new changes in employee reduction will come into effect by mid-December in both of the company’s work facilities. However, none of the information was revealed about the specific employees.

As of September 2022, Qualcomm recorded over 51,000 employees, and the current layoffs are about 2.5% of the entire workforce. The layoff includes over 750 employees from the engineering department, with positions ranging from directors to technicians.

Although, the company has no additional things to say about the layoff announcement but Qualcomm mentioned the changes in line with its last quarterly earning report.

Qualcomm assessed the uncertainty in the macroeconomic and changing demand in the industry. Thus the company is poised to take additional measures to prevent loss and keep a way open to keep on flowing funds for future projects.

To achieve growth opportunities, Qualcomm indicated making ‘workforce reductions’.

“We currently expect these actions to consist largely of workforce reductions, and in connection with any such actions we would expect to incur significant additional restructuring charges, a substantial portion of which we expect to incur in the fourth quarter of fiscal 2023.” wrote Qualcomm in the filing.

With all of that, Qualcomm could make more changes in the company structure that will be completed in the first half of 2024.

Huawei:

Huawei has been using Qualcomm 4G chipsets since 2021. The company fused the Snapdragon 888 chip in the Huawei P50 series. Thereafter, it kept on using the Qualcomm semiconductor in its devices.

However, in August 2023, Huawei brought back the Kirin chipset, which it designs in-house. Amid this, Industry analyst Ming-Chi Kuo predicted that Qualcomm could lose big due to the return of Huawei’s own chip.

The analyst revealed that Huawei placed about 23-25 million and 40-42 million mobile SoC for 2022 and 2023 respectively. However, 2024 could be a fresh start for Huawei and the company may no longer need to buy 4G chips from Qualcomm.

Similarly, Chinese smartphone makers are also going through a tough phase of restructuring their own future plans. This left, Qualcomm no other choice than cutting a large number of employees to avoid loss.