In a move to tighten its belt amidst market uncertainties, Qualcomm (NASDAQ:QCOM) has announced plans to lay off 1,258 jobs across its California offices, affecting approximately 2.5% of its over 51,000-strong workforce. The layoffs are scheduled to take effect on December 13, as disclosed in a recent U.S. securities filing.
The majority of the layoffs will impact workers in San Diego, with 1,064 employees set to lose their jobs. An additional 194 positions will be eliminated in Santa Clara. Despite these significant cuts, no facility closures are currently planned.
This decision follows a disappointing fiscal Q4 outlook that led to a drop in Qualcomm's shares and an ongoing slump in smartphone sales. The company anticipates significant additional restructuring charges due to these workforce reductions.
In the fiscal third quarter results announcement, CEO Cristiano Amon stated that the company is adopting a conservative market view and implementing proactive cost-cutting measures to ensure maximum value for shareholders amidst these market uncertainties.
According to InvestingPro data, Qualcomm's market capitalization stands at 124.78B USD with a P/E ratio of 14.41. The company has seen a revenue growth of -8.44 % in the last twelve months until Q3 2023 and a quarterly revenue growth of -22.72 % in FY2023.Q3. Despite these numbers, the company maintains a healthy operating income margin of 29.51% and a gross profit margin of 56.31%.
InvestingPro Tips reveal that Qualcomm is a prominent player in the Semiconductors & Semiconductor Equipment industry and has been profitable over the last twelve months. It operates with a moderate level of debt and its liquid assets exceed short term obligations. This suggests that while facing current market instabilities, the company has a strong financial position.
Additionally, Qualcomm has a history of rewarding its shareholders. It has raised its dividend for 20 consecutive years and stockholders receive high returns on book equity. The company's dividend yield stands at 2.87% as of 2023, with a dividend growth of 6.67% in LTM2023.Q3.
While U.S operations face downsizing, Qualcomm dispelled rumors about closing its Shanghai, China R&D facility. The company confirmed plans for downsizing due to economic instability and variable demand.
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