Qualcomm has confirmed plans of cutting around 1,500 jobs in California. The San Diego-based company has nearly 34,000 employees worldwide with offices in both Santa Clara and San Jose. The company has stated layoffs will occur at multiple locations. The purpose of letting these employees off is to meet a $1 billion savings commitment the company made to investors. The company’s last cuts occurred in 2015, when it had to cut costs due to a decrease in sales.
The company is cutting costs due to a commitment made to investors that involved reducing expenses by $1 billion. According to The Mercury News, Qualcomm has “pledged to reduce its corporate spending as part of its efforts to win over shareholders as it fought a hostile takeover attempt by rival Broadcom, [but] Trump administration eventually put the brakes on Broadcom’s acquisition plans by cancelling the deal on national-security grounds.”
Qualcomm made the following statement about their recent layoffs in an interview with The Verge:
“We first evaluated non-headcount expense reductions, but we concluded that a workforce reduction is needed to support long-term growth and success, which will ultimately benefit all our stakeholders… [The cost reduction plan is] designed to align our cost structure to our long term margin targets.”
Since the layoffs do come on such short notice, Qualcomm is expected to file Worker Adjustment and Retraining Notification notices over the next couple days to the state of California. According to The Verge, “the WARN notices are mandatory for companies that undergo mass layoffs of 50 or more employees within a 30-day period [and] also requires the company to give affected employees 60 days’ notice that they will be let go.”
Qualcomm does plan to offer severance payments to the 1,500 employees who will be laid off as a way to compensate their departure.