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US Technology Giant Qualcomm Has Not Yet Emerged From The Cloud Of Layoffs, And Its Struggling Data Center Business Has Once Again Been Hit Hard.
Dec 13, 2018

Technology news website "the information", CNR, etc. On December 7, Qualcomm is laying off 269 people in the data center business, including 125 in the San Diego office in California and 144 in the Raleigh office in North Carolina. A person familiar with the matter said that the data center department currently has only about 50 employees left, far below the nearly 1,000 employees earlier this year.

 


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A spokesperson for Qualcomm confirmed the layoffs that night and said the layoffs only affected Qualcomm's data center division.

The spokesman said in a statement that Qualcomm is cutting back on its investment in data center business, but is still committed to fulfilling its business obligations, as well as the edge computing business of 5G networks and artificial intelligence cloud solutions.



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In addition, the statement also pointed out that Qualcomm will continue to support Guizhou Huaxintong Semiconductor Technology Co., Ltd. (HXT) business, and will fully focus on the implementation of 5G plans.

The layoffs are a sign that Qualcomm is shrinking its data center business. According to the "techcrunch" website, in June this year, Qualcomm actually announced that it is preparing to lay off 241 people in the data center, mainly because the business is in a disadvantageous position in the competition with Intel. However, Qualcomm denied that it would abandon the business.

In addition, data center business unit president Anand Chandrasekher and technology vice president Dileep Bhandarkar have also left this year.



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The "the information" website believes that the legal battle between Qualcomm and Apple is also one of the factors.

The layoffs are the latest in a series of cost-cutting initiatives by Qualcomm in recent years. In March of this year, Broadcom launched a hostile takeover of Qualcomm, but was stopped by Trump. On April 20 this year, Qualcomm announced that it would lay off 1,500 people in San Diego, San Jose and Santa Clara, California, to save $1 billion in expenses. Appease the shareholders who agreed to the Broadcom acquisition.



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In September 2015, Qualcomm also announced a massive layoff of 15% due to pressure from investors, involving more than 4,500 employees.

Qualcomm has been in a bad situation in recent years. According to the financial report, Qualcomms revenue has declined for three consecutive years. From FY2015 to FY2017, it fell by 5%, 7% and 5% respectively. Profits and net profit also plummeted. It is not unrelated to the increase in competitors and the suspension of cooperation with Apple, the largest customer, due to patent disputes.

The news of layoffs on December 7 revealed that Qualcomm shares fell 1.96% to $55.99.



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