Qualcomm cutting jobs amidst financial woes, legal battle with Apple

Posted:
in General Discussion edited April 18
U.S. chipmaker Qualcomm on Wednesday confirmed it is conducting layoffs as part of cost-cutting measures announced in January. The firm is fighting to remain afloat after a tumultuous few months that saw a failed hostile takeover by Broadcom, multiple government inquiries into unsavory business practices and a protracted legal war with Apple.

Qualcomm


Citing sources familiar with the matter, Bloomberg reports Qualcomm is in the process of culling about 1,500 jobs in California as part of a wider effort to save $1 billion annual costs.

While an exact figure or timeline was left unreported, the company will have to divulge that information when it files a Worker Adjustment and Retraining Notification, or WARN, notice with the state of California. Companies are required to notify officials when 50 or more jobs are cut within a 30-day period.

Qualcomm later confirmed the cuts to Axios, saying in a statement that the layoffs of full-time and part-time employees are part of cost reduction measures first announced in January. Further clarifying the situation, the company said it initially evaluated expense reductions not related to its workforce, but concluded job cuts are necessary to ensure financial success.

A spokesperson informed Reuters that employees impacted by the layoffs have been offered severance packages.

Qualcomm is fighting to stay alive amidst a flurry of recent developments.

Last year, rival chipmaker Broadcom initiated a hostile takeover bid that caught the attention of U.S. government regulators. After months of negotiations and maneuvering, the Trump administration last month blocked Broadcom's bid citing national security risks.

On the heels of the Broadcom development, Paul Jacobs, former Qualcomm CEO and recently ousted board member, is looking to raise enough capital to buy the company with the intent to take it private. Whether the undertaking will gain traction remains to be seen.

Qualcomm also faces an ongoing court battle with Apple that spans multiple international jurisdictions. Apple lobbed the first bomb with a nearly $1 billion lawsuit accusing Qualcomm of monopolistic practices, price gouging and extortion.

The chipmaker launched its own assault claiming breach of contract, with later suits in Germany and China alleging infringement of owned patents. Qualcomm also filed a complaint with the U.S. International Trade Commission seeking a ban on iPhone 8 and iPhone X handset sales.

Beyond Apple, Qualcomm's legal woes extend to government investigations into its business practices. In January, the company was charged a $1.2 billion fine by EU regulators over illegal contract guarantee payments made to Apple.

Comments

  • Reply 1 of 16
    foggyhillfoggyhill Posts: 4,692member
    I called it (1 year ago). Qualcomm is in deep, they didn't just screw Apple, they also screwed Samsung and with the Chinese mostly going their own way in the future on chips, they're in for a lot more pain in the future.

    So, they got fantastic profits for a decade on the backs of their clients; what did they think would happen when those clients found a backup plan and a way out.

    If Intel is able to produce an Arm chip with their comm on it, they'd be mostly dead and likely will need to bought up for their IP.
    edited April 18 anantksundarambshankjony0
  • Reply 2 of 16
    widmarkwidmark Posts: 12member
    Would not surprise me to see Apple buy them...and sell off what they don’t want, or just buy or license the part they do.  Intel modems don’t perform as well as Qualcomm’s in iPhones, so Intel is not a very good alternative there yet.  A forever license deal seems more likely -regulators don’t really want Apple to control the Android chip market, and neither would Apple.
    watto_cobra
  • Reply 3 of 16
    The company will wind down or be sold. The only question is when. 

    Corporate hurbis is rarely a good strategy. 
    bshanknetmagewatto_cobra
  • Reply 4 of 16
    wood1208wood1208 Posts: 1,435member
    Broadcomm and Apple should bid for Qualcomm now that Broadcomm is re-domicile in USA. Than, Apple integrates modem and other chips on A-series SOC.
    watto_cobra
  • Reply 5 of 16
    As an American company , I feel sad that Qualcomm had to come down to this.
    But some of their technology, has hindered product development for companies like Apple & Samsung.
    So ,I pray they work more closely with the device manufacturers, and lower their licensing fees. 
    watto_cobra
  • Reply 6 of 16
    widmark said:
    Would not surprise me to see Apple buy them...and sell off what they don’t want, or just buy or license the part they do.  Intel modems don’t perform as well as Qualcomm’s in iPhones, so Intel is not a very good alternative there yet.  A forever license deal seems more likely -regulators don’t really want Apple to control the Android chip market, and neither would Apple.
    Keep on saying that pal. Intel chips are already more than good enough. 
    tmayleavingthebigg
  • Reply 7 of 16
    Apple is doomed. /s
    melodyof1974watto_cobra
  • Reply 8 of 16
    Rayz2016Rayz2016 Posts: 3,779member
    widmark said:
    Would not surprise me to see Apple buy them...and sell off what they don’t want, or just buy or license the part they do.  Intel modems don’t perform as well as Qualcomm’s in iPhones, so Intel is not a very good alternative there yet.  A forever license deal seems more likely -regulators don’t really want Apple to control the Android chip market, and neither would Apple.
    Intel chips not performing as well makes a difference to almost zero per cent of the Apple-buying public. No one can really tell the difference, but wannabe geeks like to pretend they can. 

    Unfortunate for Qualcomm, but their weird licensing was their idea. 
    edited April 19 netmagetmayradarthekatStrangeDaysjony0watto_cobra
  • Reply 9 of 16
    SoliSoli Posts: 7,656member
    Rayz2016 said:
    widmark said:
    Would not surprise me to see Apple buy them...and sell off what they don’t want, or just buy or license the part they do.  Intel modems don’t perform as well as Qualcomm’s in iPhones, so Intel is not a very good alternative there yet.  A forever license deal seems more likely -regulators don’t really want Apple to control the Android chip market, and neither would Apple.
    Intel chips not performing as well makes a difference to almost zero per cent of the Apple-buying public. No one can really tell the difference, but wannabe geeks like to pretend they can. 

    Unfortunate for Qualcomm, but their weird licensing was their idea. 
    Power consumption is surely more important to Apple than some theoretical data speed that can only be tested on a few towers from a specific distance in a couple countries that are barely a blip in sales for Apple. The cellular chips in the Series 3 Watch may be designed by Apple. If it is, I wonder what they could do in the near future. They did buy Nortel patens several years ago, right?
    watto_cobra
  • Reply 10 of 16
    adm1adm1 Posts: 831member
    it's a shame that it's the hard-working employees at the bottom of the pile that feel the effects of the bad decisions of the few elites at the top. sounds a lot like western society in general.
    StrangeDaysjony0watto_cobra
  • Reply 11 of 16
    19831983 Posts: 1,040member
    How did this company’s management become so rotten?
    watto_cobra
  • Reply 12 of 16
    radarthekatradarthekat Posts: 2,424moderator
    adm1 said:
    it's a shame that it's the hard-working employees at the bottom of the pile that feel the effects of the bad decisions of the few elites at the top. sounds a lot like western society in general.
    I don’t know.  Free will suggested to me a very clear path.  I had only a technical high school education and four years in the Air Force working as an F-15 avionics technician when I joined the fast moving and dynamic technology industry back in the mid 1980s.  I figured I’d better get good fast at something and control my own career.  I wasn’t working a factory job where there was little opportunity for advancement; I was in an 8-person hardware startup - as a $6.50/hour assembler - when I saw opportunity all around me.  I quickly made myself indispensable and ended up working with the same two Harvard MBAs who started that little company throughout a 26-year career and two more successful startups, the last of which I was co-founder and VP Product Development.  I busted my butt and took control of my destiny; that’s what free enterprise and capitalism allows.  I can’t feel anything but hope and confidence for anyone lucky enough to be working in technology.  There’s opportunity all around for those former Qualcomm employees.  If they take control of their own destiny.  
    edited April 19 beowulfschmidtwatto_cobra
  • Reply 13 of 16
    GG1GG1 Posts: 177member
    1983 said:
    How did this company’s management become so rotten?
    Qualcomm were ahead of the competition (Motorola, Infineon/Siemens) in modem chipset development back in the 90's, and they leveraged this advantage with very restrictive licensing practices, which continue today. No company has had the money and patience to challenge these practices until Apple. Now Qualcomm have met its match.
    watto_cobra
  • Reply 14 of 16
    lkrupplkrupp Posts: 6,073member
    Apple is doomed. /s
    You are being sarcastic but don’t be surprised if some tech blogger from Motley Fool or Business Insider spins it into exactly that.
    watto_cobra
  • Reply 15 of 16
    maestro64maestro64 Posts: 4,140member
    Upper management screws up, they keep their pay and bonuses and lay off everyone else.
    StrangeDayswatto_cobra
  • Reply 16 of 16
    Qualcomm - Keeping specialists and engineers around to be competitive? Ain't got no time for that shit! Quick, fire everyone except execs and lawyers. In fact, hire more lawyers! We will sue Apple for a ton of money for our retirement!
    edited April 19 watto_cobra
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