Qualcomm Cuts Staff and Mulls Break Up after Profits Drop 50%
Samuel Wan / 1 year ago
After years of dominating the mobile SoC industry, Qualcomm has suffered a pretty bad quarter. Compared to the same time last year in 2014, the firm has earned 47% less profit which means they made about half as much as they did the year before. Interestingly, the stock market has not taken the news badly, only falling 1.46% so far though they have been trading down over the past while.
Qualcomm has had a rough start to the year so far. Last quarter, the firm took a $1 billion fine due to an antitrust lawsuit with the Chinese government. Despite, not being burdened with a fine this past quarter, profit did not noticeably improve, only posting $1.2 billion, down from $2.2 billion last year. Revenues also fell sharply, down about $1 billion which is not a good sign. In an effort to cut costs, Qualcomm is planning on cutting 15% of its staff and is even considering a split.
Much of the trouble can likely be traced to the underperforming Snapdragon 810. That chip has been suffering from performance and thermal issues, leading some OEMs to avoid it. Samsung, the largest Android OEM, has also shipped their own Exynos SoCs in their Galaxy S6 globally, removing a major customer. Much of the focus for mobile devices have also been on the budget side, where margins are thinner. With both MediaTek and Intel looking to make inroads, Qualcomm needs to get their newer chips out that will hopefully be more competitive.