After the Trump administration blocked the sale of Qualcomm to Broadcom, investors in the US-based Chipmaker have been calling for a massive reduction in cost
US Chipmaker Qualcomm started to cut jobs at its facilities in California in order to meet the company's promise to investors to cut costs by $1 billion. The San Diego-based wireless giant had planned to trim 1,231 jobs in San Diego and 269 at its offices in San Jose and Santa Clara in mid-June, Xinhua reported.
Workers were told of the layoffs on Wednesday. A company spokesperson was quoted as saying that this move, a reduction of full-time and temporary workforce, is a part of the cost reduction plan announced in January, and the company found it is necessary to support long-term growth and success after evaluated other plans.
According to the San Diego Business Journal, Qualcomm filed a Worker Adjustment and Retraining Notification (WARN) notice with the state of California on Thursday stating 1,500 employees in the state will be terminated on or about June 19, 2018.
The regulation of the US Department of Labor Employment and Training Administration shows, a WARN notice must be given by the employer, "if there is to be a mass layoff which does not result from a plant closing, but which will result in an employment loss at the employment site during any 30-day period for 500 or more employees". The company pledged to cut costs earlier this year as part of its effort to fend off a hostile takeover attempt from chip rival Broadcom.
Earlier this year, there was an attempt by Broadcom to buyout Qualcomm, with the Singapore based chip-maker offering $103 bn for the company. Qualcomm rejected the deal, calling it an unsolicited offer. Broadcom increased their offer to $121 bn in a second bid, dropping it down to $171 bn. After rejecting various proposals, Qualcomm issued a statement that they would agree to a buyout provided Broadcom was to offer a fair price, which the company felt had not been the case so far. However, the Donald Trump administration blocked Broadcom's buyout on national security grounds, leaving Qualcomm investors frustrated by its lagging share price and poor financial performance relative to its semiconductor peers.
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