The rumors of Qualcomm planning a huge reorganization were true -- and unfortunately, that means a lot of people are about to lose their jobs. The mobile chip maker has announced a "strategic realignment" plan that will see the company slash 15 percent of its full-time jobs (the company has about 30,000 total employees) as part of a bid to cut $1.4 billion in costs. It's also considering the possibility of splitting into separate businesses. That may well happen, since a hedge fund calling for the split just got spots for two of its nominees on Qualcomm's board of directors. You'll hear about the company's direction by the end of the year.
There's certainly a lot of pressure to shake things up. Qualcomm's latest quarterly results show that it's facing trouble if it doesn't act quickly -- its net profit has dropped almost by half in the space of a year, to $1.2 billion, and it's losing customers left and right. MediaTek now manufactures a large portion of the chips for low-end and mid-range mobile devices (particularly in China), and Samsung's decision to ditch Qualcomm for the Galaxy S6's processor is hurting sales of high-end Snapdragon parts. Simply speaking, Qualcomm has to scale back and acknowledge that it's no longer the unquestioned market leader in smartphone silicon.