Qualcomm Job Cuts Total 4.4% of Workforce So Far -- Update

By Ted Greenwald 

Qualcomm Inc. began laying off employees, pursuing a promise to boost profit by shedding $1 billion in expenses, the company said.

The San Diego company first considered other ways to cut costs, it said Wednesday, and is offering severance packages to the affected employees.

Qualcomm is cutting 4.4% of its workforce starting in June, according to documents filed with the state of California. The layoffs include 1,231 employees in San Diego, where the chip maker has its headquarters, and 269 in San Jose and Santa Clara, according to the documents.

The company employed 33,800, including part-time workers, as of September 2017, according to a regulatory filing.

Qualcomm on Wednesday said it had first considered other ways to cut costs and is offering severance packages to the affected employees.

The $1 billion cost-reduction program is part of a profit-boosting plan unveiled in January, intended to persuade investors the company would be more valuable on its own than combined with Broadcom Corp., which at the time was pursuing a hostile takeover bid. President Donald Trump scuttled Broadcom's overture with a March executive order blocking a deal on national security grounds.

Qualcomm finance chief George Davis told investors in January that the savings would come from eliminating nonstrategic programs, cutting sales and general expenses, restructuring the patent-licensing business and getting past early investments in the next-generation cellular technology known as 5G.

The plan also includes settling a bitter legal dispute with Apple Inc. over patent royalties and either purchasing the Dutch automotive-chip maker NXP Semiconductors NV or buying back shares.

Qualcomm's goal is adjusted earnings of $6.75 to $7.50 a share in fiscal 2019, up from $4.28 in fiscal 2017.

Qualcomm shares closed down 4.8% at $52.57 Thursday in Nasdaq trading.

Write to Ted Greenwald at [e-mail]

(END) Dow Jones Newswires

April 19, 2018 18:48 ET (22:48 GMT)

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