Smartphone chipmaker Qualcomm Inc. plans to eliminate 1,258 jobs, the latest in a string of cost-cutting measures it has implemented this year.

The company said in a filing with the California Employment Development Department that the job cuts will affect workers at Qualcomm San Diego and Santa Clara, California. Qualcomm had about 51,000 employees in September, so the cuts amount to 2.5% of its overall workforce, according to its most recent annual financial report.

The filing states that more than 750 jobs will be cut from Qualcomm’s engineering teams. The cuts will affect roles at levels ranging from executives to technicians. The remaining cuts will come from a broader range of roles, including its internal technical staff and accounting teams.

Qualcomm said it will hand pink slips to 194 workers in Santa Clara and 1,064 staff in San Diego. The affected employees will be terminated in December, the filing said. Qualcomm is required to make the filing under California’s laws, but it is not obligated to do so at its other locations.

The chipmaker had already slashed its cost base by about 5% this year, relative to its spending in 2022. Those measures included an earlier round of layoffs that saw 415 jobs cut at its San Diego campus. In its most recent earnings call in August, Qualcomm Chief Financial Officer Akash Palkhiwala warned that there could be more job cuts on the way, saying the company would “proactively implement additional cost actions.”

The layoffs are the latest in a string of job cuts to impact the technology industry this year. The company specializes in making the processors that sit at the heart of virtually every Android smartphone in the world, and also many of Apple Inc.’s iPhones. Qualcomm makes billions of dollars every year in revenue, but lower sales of smartphones this year have eaten away at its profits. Moreover, Apple is reportedly developing its own smartphone chips internally in order to cut its ties with Qualcomm.

Qualcomm, which will report its fiscal fourth-quarter earnings next month, is likely to see its revenue decline by about 19% this year. Chief Executive Cristiano Amon has pushed to diversify Qualcomm into new markets, making RISC-V chips for Internet of Things devices, virtual reality headsets and cars. But despite these efforts, the lion’s share of its revenue still comes from a smartphone market that hasn’t rebounded as fast as some analysts had expected.

Constellation Research Inc. analyst Holger Mueller said Qualcomm has suffered more than most lately in the rollercoaster ride that best characterizes the chipmaking industry. “Qualcomm has, until recently, managed to buffer these ups and downs without affecting its employee base too much, but now it looks like the company needs to make some cuts,” the analyst said. “With all of the cuts happening in California, it’s possible that Qualcomm might be looking to reduce its workforce exposure in what is one of the highest cost states, and it could well hire new talent in other areas as a result. We’ll know for sure when we see which areas start looking for new hires.”

Shareholders appeared indifferent to the Qualcomm news, with shares little changed in the hours after the report. All told, Qualcomm’s stock is up just 1% in the year to date, lagging behind the wider Philadelphia Stock Exchange Semiconductor Index, which is up 40% for the year.

Photo: Qualcomm