Qualcomm To Cut Workforce
Qualcomm said it may break itself up as it delivered its third profit warning this year and announced plans to slash jobs and spending in the face of rising competition. The company said it would reduce costs by about $1.4 billion, cut about 4,500 full-time staff, or 15 percent of its workforce, and boost capital returns to shareholders.
The San Diego-based company has been under intense pressure recently from Jana Partners, a major shareholder, to make changes.
"We decided we were going to take a fresh look at the corporate structure of the company," Qualcomm president Derek Aberle said, adding that the chipmaker has reviewed its options twice already in the past decade.
"The environment is constantly changing so the analysis done earlier may not be valid anymore, so it's in that context that we're taking a look at it again now," Aberle said.
The company expects to complete its strategic review by the end of the year and also agreed to add three new board members, followin pressure from Jana Partners.
Qualcomm faces intense competition from Taiwan's MediaTek and some other small Chinese companies that specialize in making chips for low-priced phones.
This year, Samsung said it would use its own processor for the new Galaxy S6 smartphone instead of Snapdragon.
The company cut both its full-year revenue forecast and the outlook for its semiconductor business.
Qualcomm's revenue fell 14.3 percent to $5.83 billion in the third quarter.