Qualcomm has been besieged by problems lately and quite a few of its employees may soon pay the price. It's planning to lay off around 10 percent of its workforce -- several thousand employees -- according to The Information. The WSJ is also reporting that the company will conduct a comprehensive review of its operations and may split into two separate businesses: chip production and patent licensing. Qualcomm profits dropped drastically last quarter due to delays in the launch of its flagship Snapdragon 810 chip and the loss of one of its largest customers, Samsung. The company was ordered to pay a $975 million antitrust fine in China and is facing the same problem in the EU.
Qualcomm is also up against increased competition from rivals like MediaTek, Samsung and numerous smaller chip-makers in China. This time last year, the company was announcing record profits and predicting that its processors would soon be everywhere. Still, it had long been expected that Samsung would eventually use its own Exynos chips instead of Snapdragon models, and Qualcomm has been mulling a breakup for quite a while. Its chip-making business currently generates two-thirds of its revenue, but its intellectual property arm could actually be worth more, up to $87 billion compared to $74 billion for the chip arm.
Qualcomm profits dropped drastically last quarter due to delays in the launch of its flagship Snapdragon 810 chip and the loss of one of its largest customers, Samsung.
Last quarter CEO, Steven Mollenkopf said he was unhappy with Qualcomm's financial outlook and would conduct a "comprehensive review," of its cost structure. However, there's no guarantee that will result in an imminent split, cautions the WSJ. On the other hand, multiple sources have reported that at least some layoffs will happen, making that situation much more likely. We'll find out when Qualcomm releases its quarterly earnings tomorrow, July 21st.