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Qualcomm plans to cull 3,000 employees following poor sales

After plain sailing in the mobile chip market for a few years, Qualcomm is finally tasting failure. It lost a major contract this year, had to face fines in China (opens in new tab) and a lawsuit in Europe (opens in new tab) and is having to compete in a harsher market with MediaTek, Nvidia and Intel all stepping up.

Qualcomm hasn’t spoken on the issues surrounding the company, but internally it may be planning to cut 10 per cent of its workforce. A drastic measure, considering that would be around 3,000 potential employees dropped.

It follows another recent layoff splurge by Qualcomm, laying off 800 employees.

The news may come tomorrow, with Qualcomm preparing its quarterly report for investors. This may be quite a large hit on Qualcomm’s share price, but worthwhile in the long-term to keep the company from sinking into disrepair.

The Information reports that Qualcomm is finding it hard to compete in the low-end smartphone market in India and China, where MediaTek is grabbing most of the contracts. Add to that Samsung dropping Qualcomm in favour of its own mobile chip division, it is starting to lose grasp of the industry.

Qualcomm is still way ahead of MediaTek and other brands in Europe and the United States, with HTC, Sony, LG and other vendors working with the company for its high-end models.

Still, the Snapdragon 810, its latest flagship mobile chip, failed to impress a lot of companies. LG decided to go with the Snapdragon 808 (opens in new tab), a lower powered hexa-core processor, due to the thermal issues on the Snapdragon 810.

Source: The Information (opens in new tab)

David has been a technology journalist for over six years, covering a wide range of sectors. He currently researches apps, app sectors and app markets for Business of Apps, and has written for ITProPortal, RTInsights, ReadWrite, and Digital Trends.