Qualcomm Inc., the world's largest smartphone chipmaker, is cutting jobs to combat sluggish demand for its key products. The company will eliminate 1,258 positions in San Diego and Santa Clara, California, according to documents filed with the California Employment Development Department. A Qualcomm representative declined to comment on the overall size of the layoffs, which currently employs about 50,000 people.


More than 750 of the positions being eliminated are from Qualcomm's engineering department, ranging from supervisor to technical staff levels. The remaining cuts will come from in-house technical staff and accounting positions. Qualcomm said in the notice that layoffs will begin in mid-December.

Qualcomm is the world's largest mobile chip supplier, and its business is mainly concentrated in smartphones, tablets, vehicle infotainment systems and other fields. However, in recent times, the global smartphone market has become saturated, coupled with the slowdown in 5G network construction, putting Qualcomm's performance under greater pressure.

In this context, Qualcomm has to take measures to optimize operating costs and improve efficiency. Layoffs are one of them, and this measure is also a common method in the industry to deal with market downturns. Many technology giants have not escaped the "wave of layoffs."

Qualcomm Chief Financial Officer Akash Palkhiwala told analysts in August that Qualcomm would "aggressively implement additional cost measures."

"We have previously stated that we will evaluate additional cost actions as the environment continues to change. Our operating framework does not foresee an immediate economic recovery until we see signs of continued improvement in fundamentals," he said on the call.

The company will announce its financial results next month, and it is expected that the company's revenue will shrink by about 19% this fiscal year.

While CEO Cristiano Amon is trying to push Qualcomm's products into new areas, the majority of the company's sales still come from the mobile phone market. Demand for iPhones, especially in China, hasn't rebounded as quickly as some predicted.

As of Thursday's close, Qualcomm fell 0.3% to $111.46. The stock has gained about 4% this year, lagging the Philadelphia Stock Exchange Semiconductor Index's nearly 40% gain.