Qualcomm expected to announce layoffs
Qualcomm is expected to layoff at least 10% of its 30,000 workforce when it presents its fiscal Q3 2015 earnings
Mobile chip maker Qualcomm is expected to layoff at least 10% of its 30,000 workforce when it presents its fiscal Q3 2015 earnings this week, according to a report in The Information.
But that's not all. Prodded by activist investor Jana Partners, an $11bn hedge fund with a $2bn stake in Qualcomm, the chip maker is said to be prepping a comprehensive review of its operations that might include a corporate breakup, returning more cash to shareholders and perhaps a reshuffling of its board.
Qualcomm has also been under pressure from Jana to spin off its chip business from its highly profitable patent-licensing business. In addition, Jana reportedly has pushed Qualcomm to pare costs, offer shareholders a revised repurchasing plan and update its board of directors, the Wall Street Journal reported. Jana reportedly also has been angling for a say in Qualcomm's adding independent directors, the report said.
The company hasn't yet decided on a course of action, the Journal said, and could change its plans at any time. And, it may not announce its blueprint with Q3 earnings, preferring to wait for a later date.
Qualcomm has not commented on the reports other than to say it reviews its corporate structure periodically. Earlier reviews have concluded shareholders prefer the current setup, the company said.
Steve Mollenkopf, Qualcomm's chief executive, previously said the chip maker has instituted an examination of its cost structure, the results of which are expected this week, the Journal reported.
As for the layoffs, there's no word at this point which business units the cuts will hit.
For Q3 2015, Qualcomm forecast a significant slide in sales and earnings from the same time last year, as the vendor has guided to $5.4bn to $6.2bn in sales, a 9% to 21% drop from the $6.8bn the company posted in Q3 2014. Per share earnings for the upcoming period are expected to come in at $0.67 to $0.82, for a 37% to 49% slide from last year.
In its FQ2 2015, Qualcomm reported net income of $1.1bn, or $0.63 a share on $6.9bn in revenue, for a 3% increase in sales but a 45% tumble in earnings from the same period last year.