U.S. chip giant Qualcomm is reportedly laying off hundreds of workers at its Taiwan office, and is expected to reduce its Shanghai workforce following a slump in chip sales and weaker demand for handsets.
A former employee of Qualcomm reportedly said workers were being forced to sign "mutual termination agreements," local media reported.
The appropriate authorities, Taiwan's National Science and Technology Council and the Hsinchu Science Park Bureau, were not informed in advance about the layoffs, another report said. Employers are reportedly required to notify the bureau 10 days in advance of any workforce reductions.
Qualcomm is also cutting its Shanghai workforce as per Chinese media. The company confirmed to state-backed newspaper China Daily that it was slashing the Shanghai unit, but denied earlier speculations that "large-scale layoffs" were taking place.
Qualcomm previously said last month that it would implement headcount cuts.
"While we are in the process of developing our plans, we currently expect these [restructuring] actions to consist largely of workforce reductions," the company said in an SEC filing around the same time it released its 3rd quarter results early in August. At the time, the company did not provide details about the exact number of employees and geographies that will be affected by upcoming layoffs.
In its Q3 2023 earnings report, Qualcomm said handset chip sales were down 25% year-over-year. The slump in Qualcomm's chip sales came at a time when Chinese tech giant Huawei, which reportedly deems Qualcomm as its biggest rival, bounced back earlier this month with a new smartphone that featured SMIC's 7nm technology in its Kirin 9000S chip.
Qualcomm, on the other hand, has seen a decline in revenue, as weak demand for smartphones ensued. Its 2nd quarter 2023 revenue and profit were below Wall Street estimates.
CEO Cristiano Amon told investors during its 2nd quarter 2023 earnings call that the company was expecting "elevated channel inventory levels to persist at least through the first half of calendar 2023" due to reduced demand in the handset industry.
Qualcomm has since implemented layoffs in the U.S., with 415 jobs from its San Diego headquarters being eliminated in July. It also cut 84 positions in the Bay Area at the time.
The company previously slashed a total of 232 employees in December and March in San Diego.
In the greater tech industry, more than 236,000 employees have lost their jobs as per layoffs tracker layoffs.fyi. In the past month, the hardest-hit segments were fintech, crypto, edtech and healthtech.
