As ongoing technology tensions rise between the US and China, Qualcomm is set to reduce its workforce at its Shanghai office. The exact number of affected employees has not been mentioned, but the layoffs will primarily impact the wireless business research and development department.
Qualcomm maintains offices in over a dozen Chinese cities for its semiconductor and mobile telecommunications ventures. In an August stock exchange filing discussing its quarterly revenue, Qualcomm noted its anticipation of ‘workforce reductions’ as part of broader restructuring efforts. The company mentioned that it aims to facilitate ongoing investments in critical growth and diversification endeavours, given the persistent macroeconomic and demand uncertainties.
The company has stated that it will provide attractive severance packages to all the affected employees.
Qualcomm China reportedly maintains research and development centres in both Beijing and Shanghai. Additionally, in recent years, the smartphone market’s slow growth and competitive pressures have significantly impacted supply chain companies such as Qualcomm. Cost cutting and efficiency improvements have become common strategies for global tech firms.
Simultaneously, the company faces a persistent challenge from its rivals in the mobile phone market. In the second quarter of 2023, smartphone sales in China declined by 4 percent compared to the previous year. This drop was attributed to economic challenges that negatively impacted consumer sentiment, resulting in the lowest second-quarter sales figures since 2014.
Several other US chip companies have been downsizing their workforce in China as well. For instance, in March, Marvell Technology, based in California, announced the complete closure of its research and development team in mainland China in response to an industrial downturn. This move came approximately five months after the company initiated job cuts to streamline its operations in the country.