Chipmaker Qualcomm is planning job cuts globally including in China, but denies rumors it is withdrawing entirely from Shanghai amidst the broader industry downturn.
In an official statement, Qualcomm said layoffs are part of previously announced “adjustment measures” planned through early 2024 in light of weak smartphone sales and economic uncertainty.
However, claims that Qualcomm intends to leave Shanghai altogether are overstated according to the company, layoffs represent localized cuts rather than a full exit.
Qualcomm expects restructuring charges up to $425 million from the job reductions concentrated in Q4 2023 and Q1 2024, Qualcomm aims to complete the layoff process by mid-2024.
The news comes as Qualcomm reported a 23% annual revenue decline in its Q3 earnings. QCT semiconductor sales powering smartphones and IoT devices fell 24% year-over-year.
With global smartphone shipments projected to decline by 3.5% in 2023, Qualcomm is preemptively downsizing to cut costs.
But its China presence remains important for supplying local device makers like Xiaomi, OPPO, and vivo. Abandoning this key region entirely would not align with Qualcomm’s interests despite localized job impacts.
The layoffs illustrate how even powerful tech suppliers like Qualcomm are affected by the consumer device market downturn. But Qualcomm maintains it will stay invested in China for the long-term as it makes targeted cuts in the near-term.