Qualcomm Job Cuts Total 4.4% of Workforce So Far -- Update
April 19 2018 - 7:03PM
Dow Jones News
By Ted Greenwald
Qualcomm Inc. began laying off employees, pursuing a promise to
boost profit by shedding $1 billion in expenses, the company
said.
The San Diego company first considered other ways to cut costs,
it said Wednesday, and is offering severance packages to the
affected employees.
Qualcomm is cutting 4.4% of its workforce starting in June,
according to documents filed with the state of California. The
layoffs include 1,231 employees in San Diego, where the chip maker
has its headquarters, and 269 in San Jose and Santa Clara,
according to the documents.
The company employed 33,800, including part-time workers, as of
September 2017, according to a regulatory filing.
Qualcomm on Wednesday said it had first considered other ways to
cut costs and is offering severance packages to the affected
employees.
The $1 billion cost-reduction program is part of a
profit-boosting plan unveiled in January, intended to persuade
investors the company would be more valuable on its own than
combined with Broadcom Corp., which at the time was pursuing a
hostile takeover bid. President Donald Trump scuttled Broadcom's
overture with a March executive order blocking a deal on national
security grounds.
Qualcomm finance chief George Davis told investors in January
that the savings would come from eliminating nonstrategic programs,
cutting sales and general expenses, restructuring the
patent-licensing business and getting past early investments in the
next-generation cellular technology known as 5G.
The plan also includes settling a bitter legal dispute with
Apple Inc. over patent royalties and either purchasing the Dutch
automotive-chip maker NXP Semiconductors NV or buying back
shares.
Qualcomm's goal is adjusted earnings of $6.75 to $7.50 a share
in fiscal 2019, up from $4.28 in fiscal 2017.
Qualcomm shares closed down 4.8% at $52.57 Thursday in Nasdaq
trading.
Write to Ted Greenwald at Ted.Greenwald@wsj.com
(END) Dow Jones Newswires
April 19, 2018 18:48 ET (22:48 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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