Ryan McLeod / Android Authority
TL;DR
- Qualcomm’s chip gross sales are being affected by the down smartphone market.
- The firm’s chip gross sales have dropped by 25% yr over yr.
- Qualcomm is making ready for “workforce reductions.”
It has not been a fantastic yr for smartphones. Demand has been down throughout the board for nearly each model, aside from Google. As a direct outcome, chip makers are additionally experiencing down gross sales throughout this turbulent time. Qualcomm, the maker of Snapdragon SoCs, is having a very tough time, in keeping with its most up-to-date earnings report.
On August 2, 2023, Qualcomm printed its third-quarter earnings report. The Q3 report exhibits that handset chip gross sales have gone down by 25% yr over yr. The firm additionally recorded a web earnings lack of 52% yr over yr. And to make issues worse, the steerage for the subsequent quarter got here in decrease than anticipated, which resulted in an 8% inventory drop after the name, in keeping with Ars Technica.
Outside of the low demand for smartphones, such a decline in gross sales is stunning to see. Especially, provided that Samsung and Qualcomm signed a deal to place Qualcomm’s chips in all of its Galaxy S23 telephones. You’d suppose gross sales could be up after making a deal like that.
The severity of the losses is such that Qualcomm feels it’s compelled to take cost-cutting measures. Unfortunately, it seems like these cost-cutting measures will take the type of layoffs. As said in the report:
Given the continued uncertainty in the macroeconomic and demand surroundings, we anticipate to take further restructuring actions. While we’re in the technique of growing our plans, we presently anticipate these actions to consist largely of workforce reductions, and in reference to any such actions we might anticipate to incur important further restructuring costs, a considerable portion of which we anticipate to incur in the fourth quarter of fiscal 2023. We presently anticipate these further actions to be considerably accomplished in the first half of fiscal 2024.
Qualcomm is predicted to launch the Snapdragon 8 Gen 3 in late October. With the smartphone market not trying prepared for a comeback anytime quickly, issues aren’t trying nice at the second for Qualcomm.