Qualcomm has announced plans to lay off 15 per cent of the workforce, following one of the worst quarters for the company in recent years. The chip maker plans to restructure and focus on Asian markets, instead of building just high-end processors.
Earlier reports suggested Qualcomm would sack 10 per cent of its workforce, but it is even worse. Over 4,000 jobs are on the line now, as Qualcomm looks to recuperate losses and focus on new plans.
Qualcomm is at fault here, after failing to realise the growing markets in China and India. It also didn’t expect Samsung to drop the Snapdragon 810 for its own processor, something that hurt Qualcomm tremendously.
This quarter, Qualcomm noted $5.8 billion (£3.73 billion) in revenue, down 14 per cent from last year, and $1.6 billion (£1.03 billion) in net profit, down 35 per cent from last year. It has forced the chip maker to lower its earnings forecast for the rest of 2015, for the third time this year.
Samsung and Apple have a stranglehold on most countries, but in China, Xiaomi is still pumping out smartphones with Qualcomm chips. LG and Sony are also still on the Qualcomm bandwagon, both adding Snapdragon 808 and 810 chips to the latest flagships.
Still, Samsung and Apple control around 70 per cent of the entire mobile industry. Losing the largest mobile manufacturer is obviously going to make Qualcomm bleed, what it needs to do now is think of new ways to make money.
Qualcomm has not said where it will move next, still focused on launching the Snapdragon 820 to hopefully better results.