Qualcomm is planning layoffs across the globe, with employees whose performance has consistently fallen short of expectations set as the main target, a move described as an effort to build a "stronger performance culture."
According to Reuters, Qualcomm CEO Cristiano Amon sent an internal memo to staff on Monday announcing that the company will carry out "performance-driven layoffs" after the conclusion of its annual employee performance review, with notices to be issued starting in November. The memo did not disclose the specific number of layoffs, and Reuters was unable to immediately verify the scale of the cuts.
Following the announcement, Qualcomm shares briefly fell about 0.5% before reversing to gain more than 1%. So far this year, the stock has risen only about 1.5%, far underperforming the S&P 500's gain of more than 12%, and even more sharply trailing the Philadelphia Semiconductor Index's rise of nearly 60%.
Reshaping the talent structure under the banner of performance
In the memo, Cristiano Amon said the layoffs are intended to address the company's situation of "consistently falling short of expectations" and to focus on building a "stronger performance culture." He noted that in drawing up the layoff plan, business priorities, organizational needs, and employees' skills and expertise will be taken into comprehensive consideration.
"As our business footprint expands, so do our requirements for capabilities and skills," Amon wrote. "We must put the right people in the right roles so that employees can perform at their best and the company can continue to succeed."
As of last September, Qualcomm had about 52,000 employees worldwide, most of them full-time. The company's fiscal year typically ends in late September. Qualcomm did not immediately respond to a request for comment.
Under pressure on performance, shares lag the broader market
As one of the world's largest smartphone chip makers, Qualcomm has been hit this year by weak consumer electronics sales — surging memory prices have suppressed end-market demand in major markets, putting clear pressure on the company's overall performance.
In its latest quarterly earnings report released in late July, Qualcomm gave quarterly profit guidance below market expectations and said chip revenue from Apple products would decline faster than previously expected. At the same time, the company is gradually shifting its growth focus to data centers and other non-phone businesses, and expects that by fiscal 2027, growth in these new businesses will be enough to offset the losses from declining Apple-related revenue.
Pivoting to AI data centers, non-phone businesses become the main force
Qualcomm is accelerating its penetration into the AI data center market. The company expects that by fiscal 2027, chip sales from non-smartphone businesses will account for the majority of its overall revenue, marking a deep structural transformation for this traditional mobile chip giant.
The performance-based layoffs are also seen by outsiders as a signal that Qualcomm is proactively adjusting its internal workforce structure at a critical stage of its transformation — by optimizing talent allocation and concentrating resources on high-growth tracks, it aims to cope with the dual pressures of a downturn in the consumer electronics cycle and shifts in the competitive landscape.
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