Mobile chip giant Qualcomm (QCOM), coming off mixed Q4 2013 results, has laid off more than 100 middle-level managers and vice president-level executives and more cuts may be coming, according to a published report.
The layoffs, according to sources cited in a Gigaom account, are part of an initiative to reduce expenses with additional rounds of cuts expected soon. While 100 people have been laid off in one division within the company, it isn’t clear at this point how many workers in total will be let go or if the actions are part of a periodic housecleaning, the report said.
In its Q4 2013, Qualcomm posted $6.48 billion in sales, a 33 percent jump from the same period last year, and $1.5 billion in net income, an 18 percent uptick from last year, or $0.86 per share, but still below analysts’ expectations. For Q1 2014, while Qualcomm forecast revenue of $6.3 billion to $6.9 billion, up 5 percent to 15 percent, analysts were expecting $6.99 billion for the period. The chip maker projected Q1 EPS excluding certain items of $1.10 to $1.20 per share, a year-over-year slide of 5 percent to 13 percent. Analysts were expecting EPS of $1.29.
Early in November on an analysts' earnings conference call, Qualcomm chief Dr. Paul Jacobs appeared to hint at possible workforce reductions. Jacobs said the vendor will take “near-term actions company-wide to prioritize investments, stay focused on growth but also control expenses” as it expects “some mix and demand factors” will blunt its quarterly growth.
Toq Smartwatch, Chinese Investigation
Qualcomm also said that its new Android-based Toq smartwatch will start selling on December 2 for $349.00. The vendor said it is taking pre-orders for the all-black unit and will deliver it in one to three weeks. The Toq, which Qualcomm is positioning as a “limited edition smartwatch” against the $300 Samsung Galaxy Gear, centers around text, incoming call and email notifications and works only with Android smartphones.
The Qualcomm smartwatch is highlighted by the chip maker's new low-energy Mirasol color display which makes the device readable even in bright sunlight.
Separately, Qualcomm said it is being investigated by China’s National Development and Reform Commission (NDRC) under that country’s Anti-Monopoly Laws (AML).
“The NDRC has advised that the substance of the investigation is confidential,” Qualcomm said in a statement, adding that it is “not aware of any charge by the NDRC that Qualcomm has violated the AML. We will continue to cooperate with the NDRC as it conducts its confidential investigation.”
Qualcomm recently disclosed that it is teaming with Samsung to launch consumer-oriented smartphones equipped with location technology supported by China’s BeiDou Satellite Navigation System, which increases the number of satellites the devices can access for position accuracy.