Qualcomm to cut jobs, realign structure as Q3 revenues dip significantly
More than 4500 Qualcomm employees are set to lose their jobs in the wake of a strategic realignment plan designed to improve the company's financial position.
In its third quarter results, Qualcomm saw its revenues decline to $5.8billion, 14% lower than Q3 2014 and $1.1bn less than revenues in Q2 2015.
The strategic realignment plan calls for: 'rightsizing' the cost structure by eliminating approximately $1.4bn in spending; reviewing alternatives to the corporate and financial structure; reaffirming the plan to return significant capital to stockholders; adding directors with complementary skills; further aligning executive compensation with performance; and disciplined investment in areas that further Qualcomm's leadership positions.
"We are making fundamental changes to position Qualcomm for improved execution, financial and operating performance," said Steve Mollenkopf, pictured, Qualcomm's CEO. "Our strategic realignment plan is designed to drive meaningful change in the near term without jeopardising our ability to retain and build upon our technology leadership position and create long-term value for our stockholders."
The plan calls for Qualcomm to review of its corporate structure, including possible business separation alternatives. Currently, the company has two main operations – chip design and IP licensing, with the latter activity more profitable by far. Some analysts have speculated that either branch could be spun off.
Qualcomm says that it will continue to make 'disciplined investment' to maintain technology leadership and to drive growth while delivering attractive returns. These investments will be focused on technologies that scale across opportunities in the smartphone and adjacent markets, including modems and other differentiated technologies. Particular target markets include data centres, small cells and certain IoT verticals.
"Qualcomm has been and will continue to be the industry leader in mobile technologies," Mollenkopf contended. "We have tremendous advantages and IP leadership and are well positioned to capitalise on the significant long-term opportunities before us as mobile computing dramatically expands beyond the smartphone."
Pic: Steve Mollenkopf, Qualcomm's CEO
Source: www.newelectronics.co.ukPrevious news All news of day Next news
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