Qualcomm plans to lay off employees on a global scale, targeting those whose performance continues to fall short of standards. This move is described as an initiative to foster a "stronger performance culture."

According to Reuters, Qualcomm CEO Cristiano Amon sent an internal memo to employees on Monday this week, announcing that the company will implement "performance-based layoffs" after the annual employee performance evaluation is completed. Notifications regarding these layoffs will be sent out gradually in November. The memo did not disclose the specific number of layoffs, and Reuters was unable to immediately verify the scale of these layoffs.

After the announcement, Qualcomm's stock price fell by about 0.5%, but then turned to rise by more than 1%. Since the beginning of this year, Qualcomm's stock price has only increased by about 1.5%, which is far behind the S&P 500 index's gain of over 12%, and the gap is even more significant compared to the Philadelphia Semiconductor Index's rise of nearly 60%.

Reshape the talent structure in the name of performance

Cristiano Amon stated in the memo that this round of layoffs is aimed at addressing the company's "persistent failure to meet expectations" and at striving to create a "stronger performance culture." He noted that when formulating the layoff plan, business priorities, organizational needs, as well as employees' skills and professional capabilities, will all be taken into comprehensive consideration.

"As our business expands, our requirements for capabilities and skills also increase," writes Amon. "We must ensure that the right people are in the right positions so that employees can perform at their best and the company can continue to succeed."

As of last September, Qualcomm employed approximately 52,000 people worldwide, the majority of whom were full-time employees. The company's fiscal year typically ends at the end of September. Qualcomm did not immediately respond to requests for comment on this matter.

Performance under pressure, stock price lagging behind the market

As one of the world's largest manufacturers of smartphone chips, Qualcomm has been impacted by sluggish sales in the consumer electronics sector this year – soaring memory prices have suppressed demand from end-users in major markets, putting significant pressure on the company's overall performance.

In its latest quarterly financial report released in late July, Qualcomm provided quarterly profit guidance that fell short of market expectations and indicated that chip revenue from Apple products would decline more rapidly than previously anticipated. At the same time, the company is gradually shifting its growth focus to data centers and other non-smartphone businesses, and expects that by the fiscal year 2027, the growth from these new businesses will be sufficient to offset the losses caused by the decline in Apple business revenue.

Transforming the AI data center: Non-mobile services become the main focus

Qualcomm is accelerating its penetration into the artificial intelligence data center market. The company expects that by the fiscal year 2027, chip sales from non-smartphone businesses will account for the majority of its total revenue, marking a profound transformation in the business structure of this traditional smartphone chip giant.

This performance-based layoff is also seen by the outside world as a signal that Qualcomm is proactively adjusting its internal personnel structure during a critical period of transformation. By optimizing talent allocation, the company aims to concentrate resources on high-growth areas in order to cope with the dual pressures of a downturn in the consumer electronics cycle and changes in the competitive landscape.