US chip giant Qualcomm cuts jobs in Shanghai amid macroeconomic headwinds: report
- US chip giant is cutting jobs in Shanghai but the lay-offs are not large-scale, according to China Business News report
- Qualcomm flagged potential job losses in its last quarterly earnings report, citing macroeconomic and demand uncertainty
Qualcomm will make job cuts at its Shanghai office as the US chip giant navigates ongoing technology tensions between the US and China and economic headwinds, according to a local media report.
Qualcomm, which has one of the biggest footprints in China of any US company, said on Thursday there will be lay-offs at its Shanghai office without giving a figure, according to a report by the China Business News, a local Shanghai newspaper.
Qualcomm did not respond to a request for comment by the South China Morning Post.
According to the China Business News report, Qualcomm refuted speculation that the job cuts would be “large-scale”, resulting in an “office closure” or a total “retreat from Shanghai”.
The China Business News report followed claims made on Chinese social media that the US company was laying off dozens of people from its research and development facility in Shanghai, a pre-eminent financial and tech centre on the mainland, and was offering generous redundancy packages to affected employees.
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A Qualcomm employee in Shanghai, who declined to be named due to the sensitivity of the matter, told the Post on Thursday that the lay-offs were already taking place, with some employees receiving compensation offers, but the scale of the job cuts was quite limited.
Qualcomm has offices in more than 12 Chinese cities for its semiconductor and mobile telecommunications businesses, and is focused on “developing the world’s most advanced technology in China [relating to mobile telecoms]”, according to its official website.
Qualcomm said in a stock exchange filing about its quarterly revenue in August that it expected “workforce reductions” as a part of its “additional restructuring actions to enable continued investment in key growth and diversification opportunities”, amid continued macroeconomic and demand uncertainty.
The US company added that a substantial portion of these changes would occur in the fourth quarter of fiscal 2023.
Qualcomm has seen its revenue and profit slump amid weak demand for consumer electronics. During the three months to June 25, the company recorded a 23 per cent drop in year-on-year revenue to US$8.45 billion, while net income slumped 52 per cent to US$1.8 billion.
Qualcomm, which is a major Apple supplier, may also face pressure from Beijing’s partial ban on iPhone usage by government staff, although the successful launch of the new iPhone15 in mainland China may offset this.
During the second quarter of 2023, smartphone sales in China fell 4 per cent from a year ago as economic headwinds hit consumer sentiment, hitting their lowest second-quarter sales number since 2014, according to data from market research firm Counterpoint.
Other US chip companies have been cutting staff in China. In March, California-based Marvell Technology said it was laying off its entire research and development team in mainland China amid an industrial downturn, about five months after the firm initiated job cuts to scale down its operations in the country.
