Qualcomm may be preparing to cut 10 per cent of its work force, and is reportedly also considering a company breakup.
It’s been a turbulent year for one of the world’s biggest chip manufacturers, Qualcomm. Having been embedded at the top of the smartphone processor market for several years, the company has encountered issues with its latest high-end chip.
The Snapdragon 810 has been a bit of a disaster, with numerous reports of overheating and underperformance. This culminated in Samsung – the company’s biggest client – opting to go it alone for its latest flagship phone, the Samsung Galaxy S6.
Recent reports suggest that next year’s Snapdragon 820 isn’t faring much better.
Now The Information is reporting that Qualcomm will shed as much as 10 per cent of its staff, which will amount to job losses for several thousand employees.
As the report points out, these issues are about more than just the Snapdragon 810 flop. In fact, it’s at the other end of the market that the main problem lies.
“Prices are falling, and $50 Android smartphones are a reality in countries such as India and China,” it reads. At this end of the market, Qualcomm is being squeezed by Chinese chipmakers MediaTek and Spreadtrum Communications.
The bad news continues in a recent Wall Street Journal report, which claims that Qualcomm is to conduct a sweeping review of the organisation that could result in a company breakup.
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An activist investor is said to be pushing for the breakup as part of suggestions for a wider shakeup of the struggling chipmaker.
It’s speculated that a breakup of Qualcomm would see the company split into two parts: a chip-production business and a patent-licensing business. Apparently, it’s something that’s been on the table for years.
See how the Snapdragon 810 fares against its direct rivals as part of our smartphone grouptest video: