In short: Qualcomm started a major wave of layoffs and at least several outsourcing initiatives, multiple sources claim. The company’s Layoff.com profile recently lit up with posts from people claiming to be its employees and reporting job cuts across the board. “Lots of US positions moving to India,” one source wrote. “BCG recommends layoffs,” said another, referring to the Boston Consulting Group, a management consulting firm which has been on Qualcomm’s retainer since at least late 2015, according to the tech giant’s own disclosures. One source claims even some middle management won’t be spared during the layoffs, though details on the situation remain slim. By most accounts, the cuts will be made official by the end of the year, possibly in late October when Qualcomm is expected to report its quarterly financials. The company has yet to respond to a request for comment on the matter from AndroidHeadlines.
Background: Qualcomm had a rough year so far; the San Diego-based semiconductor firm spent a lot of energy fighting off a hostile takeover attempt from Broadcom in early 2018 and ultimately ended up being saved by President Trump following extensive lobbying. It then gave up on its proposed acquisition of Dutch NFC pioneer NXP Semiconductors valued at $44 billion, worrying analysts and angering some investors due to the fact that it spent close to two years presenting the deal as its path toward long-term diversification and added sustainability. The collapse of the NXP deal was followed by a confirmation that the successor to its flagship Snapdragon 845 chip will be manufactured on TSMC’s 7nm process node using optical lithography; despite the die size improvement, Samsung’s foundry business already pioneered a more advanced 7nm solution leveraging extreme ultraviolet lithography which is promising to be significantly more powerful and energy-efficient. Qualcomm’s former Executive Chairman Paul Jacobs who ended up being ousted during the management turmoil caused by Broadcom is now also said to be preparing a buyout bid for the company, thus possibly raising additional tensions at San Diego.
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Impact: Qualcomm’s portfolio is unlikely to be affected by any layoffs — regardless of how widespread the latest ones are purported to be — in the immediate term. Long-term ramifications of aggressive outsourcing and cost-cutting could impact the quality of its products and the new layoffs come at a relatively dangerous time as the world is currently “between Gs” and Qualcomm has yet to entrench itself in the emerging 5G segment like it did with 4G a decade ago. Without best-in-class and easy-to-deploy solutions, the company is risking ceding some of its wireless market share to competitors, though it may have gotten bolder by the fact that one of its largest rivals — Huawei — essentially got bared from doing any large-scale business in the U.S. and Android manufacturers looking to sell handsets in the West still have little choice but to continue buying and licensing its solutions.