Qualcomm is ready to cut 15% of its workforce following a shocking set of results for the third quarter of 2015 that affirm the fact that competition in the mobile processor market continues to bite.
Qualcomm's quarterly earnings report revealed a 14% revenue drop to $5.8 billion (about £3.73 billion, AU$7.87 billion) from $6.8 billion (about £4.37 billion, AU$9.23 billion) in 2014 - and that's just the tip of the iceberg.
Additionally, operating income dropped off by a shocking 40% to $1.2 billion (about £770 million, AU$1.63 billion) in just a year and net income decreased by 47% to $1.2 billion (about £770 million, AU$1.63 billion).
Following this body blow, Steve Mollenkoft, CEO of Qualcomm, told shareholders that a major restructuring is in order and 15% of workers may lost their jobs. Most of the losses will come in the firm's temporary workforce, engineering and the physical offices themselves, according to AnandTech.
It's easy to see where the loss comes from as Samsung, arguably Qualcomm's biggest customer, chose to use own Exynos processors for its flagship Galaxy S6 smartphone rather than a Snapdragon chip. Additionally, the chip maker ran into trouble with overheating Snapdragon 810 chips, plus added research and development costs of an additional Snapdragon 808 chip.
The hope is that the job losses will help it to save some $1.1 billion (about £710 million, AU$1.49 billion) in expenses per year. Qualcomm also plans to further reduce the annual share-based compensation by approximately $300 million (around £193 million, or AU$407 million).
The planned purge is expected to be completed by the end of fiscal year 2016.
There are also plans to review the entire corporate structure of the firm, capital return opportunities, and any other way they can squeeze some more stockholder value from the firm. Despite all this doom and gloom, it should be pointed out that Qualcomm made a profit. Just not the big one that it was expecting.