Qualcomm’s problems mount as its cuts 600 jobs

Qualcomm is to cut 600 jobs around the world as part of efforts to refocus its business in new areas, a company representative confirmed to CNET.

The chipmaker faces a number of challenges, including several investigations into its business practices in several markets. It also recently revised down its fiscal expectations.

CNET reported that slightly less than 300 employee roles will be cut in California, where Qualcomm’s San Diego headquarters is based. A similar number of international employees will also be laid off.

At the end of September, Qualcomm had around 31,300 employees, meaning it is cutting slightly less than two per cent of its total workforce.

The Chinese government started to investigate Qualcomm in November last year over alleged infringement of anti-monopoly laws. The mobile chipset vendor reportedly said in August that it is willing to modify its pricing in China and put an end to the probe.

The company recently disclosed that two further preliminary investigations, by the US Federal Trade Commission and European Commission, are taking place.

It has also said that the Chinese investigation has resulted in some of its licensees under-reporting sales, leading to reduced royalty revenue.

The Qualcomm representative said the job losses were not related to investigations into the company by authorities in China, the US, and Europe.

Qualcomm’s licensing revenue — which accounts for two-thirds of the company’s earnings — fell 4.9 per cent to US$1.9 billion in the most recent quarter, although total sales increased.

Steve Mollenkopf, Qualcomm’s CEO, warned investors in November that the company expects revenue over the next five years to slow as it deals with current challenges.

In terms of new business areas, Qualcomm aims to “spearhead” the definition of 5G technology to support expanded connectivity needs in the future.