Qualcomm has announced a major reorganisation of its business, in a plan which will see around 4,500 staff losing their jobs worldwide. The company also said it would not rule out breaking itself up. Through the reorganisation, Qualcomm is aiming to eliminate approximately $1.4 billion in spending by the end of 2016.
Qualcomm has been under pressure from major shareholder, Jana Partners, to make changes in the face of growing competition from Asia. Jana Partners has been pressuring the firm to separate the chip business from the more profitable patent-licensing business. Now, two Jana partners will now join Qualcomm’s board of directors to help implement the strategic plan.
The announcement came as the company released its third quarter results and issued its third profit warning this year. Qualcomm saw its net profit in Q3 fall 47% year on year to $1.2 billion from $2.2 billion, while turnover fell 14% to $5.8 billion from $6.8 billion a year earlier. For the first nine months of the year, the company’s net profit fell to $4.2 billion from $6 billion for the same period of last year, while turnover was broadly flat at $19.8 billion.
Qualcomm has again revised down its profit forecast for the year, saying it now expects net profit to be in the region of $3.05 billion to $3.3 billion, having already revised it down to $3.28 billion to $3.68 billion.
