The recent period of relief from concerning news about major tech companies laying off employees appears to be ending. According to a report from CNBC, Qualcomm has revealed its plans to lay off over 1,000 employees. This reduction in the workforce is concentrated in California, specifically targeting the Santa Clara and San Diego offices of the company.

What does Qualcomm have to say on layoffs?

In its quarterly earnings report, Qualcomm has clarified that the layoffs are part of an ongoing restructuring effort within the company. The motivation behind these workforce reductions is the persistent uncertainty in the macroeconomic and demand environment. Qualcomm aims to free up resources for continued investments in key growth and diversification opportunities.

The company has stated that it is currently in the process of developing plans for these restructuring actions. While the specifics are still being worked out, Qualcomm expects these actions to predominantly involve workforce reductions. They anticipate incurring significant additional restructuring charges, with a substantial portion expected to arise in the fourth quarter of fiscal 2023. The company anticipates completing most of these additional actions in the first half of fiscal 2024.

The recent round of layoffs affects a total of 1,258 employees, with 1,064 of them based in San Diego and the remaining 194 in Santa Clara. It's worth noting that Qualcomm is not closing its offices in either of these areas.

These layoffs were anticipated, given Qualcomm's Q3 earnings for 2023, which showed a 25% decrease in sales of mobile chips compared to the previous year, totaling $5.26 billion. Furthermore, net income saw a 52% year-over-year drop in the last quarter.

Qualcomm has also predicted a further decrease in handset sales for the current year, expecting at least a high-single-digit percentage decline. The company attributes this decline in sales to a weaker global economy and a slow recovery in China.