San Diego, Calif.-based chip maker Qualcomm has started laying off employees as part of the company’s commitment to investors that it will cut $1 billion in costs. According to a Bloomberg report, citing sources familiar with the matter, the company plans to eliminate around 1,500 jobs in California.
The chip maker employs about 34,000 people globally.
Qualcomm confirmed the layoffs in a statement to SDxCentral but didn’t provide details on how many positions the company is eliminating or where those jobs are located. “As part of the cost reduction plan announced in January, Qualcomm is conducting a reduction of our full-time and temporary workforce,” the statement said.
“A workforce reduction, such as this one, affects not only those employees who are part of the reduction, but their families, co-workers, and the community. We recognize this and have offered affected employees supportive severance packages to reduce the impact of this transition on them. We first evaluated non-headcount expense reductions, but we concluded that a workforce reduction is needed to support long-term growth and success, which will ultimately benefit all our stakeholders. ”
The company has also been caught in the crossfires between the U.S. and China. Broadcom initiated a $117 billion hostile takeover bid for Qualcomm, which was heralded as the largest tech merger of all time. However, last month President Donald Trump issued an executive order blocking the takeover bid due to concerns about national security.
In addition, the tensions between the two countries have impacted Qualcomm’s ability to close on its planned $44 billion purchase of NXP Semiconductors. Qualcomm first initiated the deal in October 2016 and had hoped to close on the acquisition in January. All countries involved in the deal — including South Korea and members of the European Union — have signed off on the purchase except for China.
Last week China’s antitrust regulator said that it had conducted a preliminary review of the transaction and found some issues with the purchase, noting that Qualcomm needs to do more to prove that a takeover of NXP won’t give it an unfair advantage over other chipmakers.
Qualcomm said today that at the request of the Ministry of Commerce, both Qualcomm and NXP have withdrawn and refiled their notice of acquisition detailing the two companies’ planned combination. And it has extended the date of the purchase agreement from April 25 to July 25. That means that if Qualcomm has not received the required regulatory approvals by July 25, it will pay a $2 billion termination fee to NXP on July 26.