Qualcomm Begins Cutting Jobs to Meet Pledge to Slash Costs

(Bloomberg) -- Qualcomm Inc. has begun cutting about 1,500 jobs in California as part of a broader workforce reduction aimed at meeting a commitment to investors to pare costs by $1 billion, according to people familiar with the process.

The layoffs in California represent the bulk of the cuts, though some positions will be eliminated in other locations, one person said. Globally, San Diego-based Qualcomm employs about 34,000 people.

Qualcomm confirmed it is reducing its full-time and temporary workforce in an emailed statement, without specifying the locations or numbers.

“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,” Qualcomm said in the statement. The company said it will offer severance payments to those affected.

The smartphone-chip maker pledged in January that it would slash $1 billion in expenses to improve earnings, part of its efforts to fight off a hostile takeover bid from rival Broadcom Inc. Shareholders were set to ignore that promise and support the acquisition offer, until the Trump administration disqualified the deal on the grounds that it would pose a national-security risk. Qualcomm’s management team now must live up to its vow and work to solve other problems that have hampered revenue and profit growth. Sales have fallen every year since 2015 and are projected to decline 3 percent in fiscal 2018.

This isn’t the first time Qualcomm has cut jobs. In 2015, after pressure from an activist investor, the chip giant announced a restructuring that resulted in thousands of layoffs.

The numbers included in the latest reduction will be clarified in the next few days when the chipmaker files so-called WARN notices, or Worker Adjustment and Retraining Notification, with California, one of the people said. Companies are required to make such a filing when they let go of 50 or more employees within a 30-day period. Qualcomm has other major locations in the state, including San Jose.

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