Qualcomm Sales Drop, People Sacked
Investors are not happy as Qualcomm sales have decreased substantially in the last months.
Android gaming fans have a lot to thank Qualcomm, the company who provides our favorite smart phones with processors and chips that make it possible for us, for example, to gain access to fast Wi-Fi. Now, however, they are in dire trouble. Qualcomm sales figures reports show that there has been a colossal decline, one that hasn’t occurred since 2009.
According to Bloomberg, the company stated that they will let go of 15% of their employees. This means that around 4,700 people will be sacked, out of approximately 31,300 total employees. They also said that they will “review strategic alternatives, including a breakup, as competition stiffens in the smartphone-chip market.” Restructuring such a huge company will take months and to optimize the balance between losses and income will be trying.
Qualcomm sales in the basement, executive pays cut
However, the company is not only letting go of 15% of its workforce. Bloomberg reports that Qualcomm wants to decrease expenses by a minimum of USD 1.4 billion. This means that letting go of so many people is not enough in itself: they will also cut salaries of executives and reshape the board. The next few months will see the largest company reduction in the company’s past. So, iPhone gaming lovers, rejoice! There is yet some hope for Qualcomm.
So, what kind of changes in the board are they talking about? According to Bloomberg, two board members – Brent Scowcroft and Duane Nelles – will be retiring, while some others will be added to the team: Tony Vinciquerra, a past executive of Fox Networks Group and Mark McLaughlin, CEO of Palo Alto Networks. Qualcomm also made a shocking promise to investors: the company aims to return 75% of cash it makes to its shareholders. They also want to release a USD 10 billion share-repurchase program. Aren’t these too big promises from a suffering company, though?