Qualcomm’s Q3 earnings for 2023 (fiscal year runs from October to September) indicate a 25 per cent decrease in sales of mobile chips, compared to the previous year, which amounted to $5.26 billion. Meanwhile, the net income dropped by 52 per cent year over year last quarter.
Qualcomm predicts that there would be a further decrease in handset sales this year by at least a high-single-digit percentage. The company attributes the downfall in sales to a weaker global economy and a slow recovery in China.
In response to lower earnings, Qualcomm plans to reduce expenses by laying off employees. Although the company had already cut 415 jobs at its San Diego headquarters earlier this year, its securities filing indicates that further reductions will be made.
Citing unstable economic and demand situations, Qualcomm plans to restructure and reduce their workforce. The company says it is still finalising the plans but expects to pay significant restructuring fees during the fourth quarter of fiscal 2023.
“Given the continued uncertainty in the macroeconomic and demand environment, we expect to take additional restructuring actions,” the filing says. “While we are in the process of developing our plans, we currently expect these actions to consist largely of workforce reductions, and in connection with any such actions we would expect to incur significant additional restructuring charges, a substantial portion of which we expect to incur in the fourth quarter of fiscal 2023. We currently anticipate these additional actions to be substantially completed in the first half of fiscal 2024.”
In September 2020, Qualcomm had around 51,000 employees.
During a call with analysts, Qualcomm’s CEO Cristiano Amon also revealed that the company intends to reduce costs. Chief Financial Officer Akash Palkhiwala added that the company’s cost-cutting measures would persist into the following fiscal year.