Qualcomm to cut costs with job layoffs and elimination of stock options
SAN DIEGO (KUSI) – In order to achieve around $1.4 billion in costs savings, Qualcomm released on Wednesday a Strategic Realignment Plan to improve execution, performance and growth.
According to Qualcomm's press release, the core elements of the plan include:
• Aggressively right-sizing the cost structure by eliminating approximately $1.4 billion in spending, including an approximately $300 million reduction in annual share-based compensation grants; Company expects to achieve this run-rate by the end of fiscal year 2016
• Reviewing alternatives to the Company’s corporate and financial structure
• Reaffirming the Company’s plan to return significant capital to stockholders
• Adding new Directors with complementary skills while reducing the average tenure of the Board of Directors
• Further aligning executive compensation with performance, including returns on investment
• Disciplined investment in areas that further Qualcomm’s leadership positions, build upon the Company’s core technologies and capabilities and offer attractive growth opportunities and returns
The chipmaker company also said they were planning on reducing their workforce.
While the company did not specify how many employees would lose their jobs, it announced that it expected the cuts would save around $1.1 billion.
CNBC reported that the personnel cuts will amount to 15 percent of the workforce.
The maker of computing chips for mobile devices also said it plans to save an additional $300 million by eliminating some stock-based incentives, and will review its corporate structure.
The company has been under pressure from activist investor Jana Partners and is considering separating parts of the company to cut costs and bolster performance.
Qualcomm said it was also at work to cut $1.4 billion in spending.