Qualcomm’s recent troubles appear to continue as the company has announced that it plans to cut its current workforce by about 10-percent. Complicating matters is talk that the company is contemplating splitting in two; separating the manufacturing and licensing divisions into different entities.
The world’s largest mobile processor manufacturer has taken a massive hit to profits this year after multiple problems involving its business. Qualcomm has faced issues with the Snapdragon 810, which was at first delayed before facing alleged overheating problems. While not everyone has experienced the heat issue, it has done a massive amount of damage to Qualcomm’s reputation. The company has also faced anti-trust action from China and the European Union.
Separation talks are being driven by Jana Partners LLC, an “activist hedge fund” investing in the company. Jana aims to increase stock value, and has also been urging Qualcomm to accelerate its repurchase of shares.
People familiar with the matter caution that Qualcomm’s plans are not yet finalised; and there is little indication that it will decide what to do in the near future. The company is already facing increasing competition from upstart chipmakers who a eating away at its profits. Samsung’s decision to switch to its own Exynos processor for the Galaxy S6 and S6 edge have also apparently caused worry for the company.
[Source: Wall Street Journal]