Harsh decisions lie ahead of Qualcomm's already shaken image

Jul 13, 2015 12:12 GMT  ·  By

After laying off around 1,500 jobs back in December 2014, Qualcomm, a company that has around 31,000 employees, will see another round of major restructuring by laying off another 4,000 workers.

According to Fudzilla, the company will make an official statement on this decision on July 22, and will go more into the details of what sort of jobs will be affected.

Being affected by the rise of ARM in the segment of mobile microprocessors, and facing a constant restructuring from Microsoft, Qualcomm tries to redress itself financially by cutting costs and improving its products.

It seems that Snapdragon 810 isn't the best system on a chip out there and Samsung and HTC are making sure Qualcomm knows this. Apparently, the chip architecture proved to be controversial since birth, as multiple reports claimed the silicone suffered from crippling overheating issues.

To keep things into perspective, MediaTek and ARM, Qualcomm's main competitor have barely 10,000 and 3,300 employees respectively and have a much better profit forecast. In this regard, Qualcomm is in danger of being forced to shrink in order to bring better mobile SoC solutions.

Change of pace is needed, together with better SoCs

Such a large workforce cut would show how hard it is for a large company to keep track with smaller more energetic firms than the likes of Nvidia and Intel. Not manufacturing general consumer goods but rather specialized business-to-business products, Qualcomm didn't have its back covered in case of a potential drop in sales of its main flagship SoC.

Not all is lost as its new Snapdragon 820 is on its way and sales might rise up again. Relying on Samsung's 14nm FinFET manufacturing process instead of Taiwan's TSMNC 16nm wafers, Qualcomm hopes that all previous overheating issues will be overcome, and Samsung's manufacturing prowess will shield Qualcomm from any future accusations. The upcoming restructuring process might also be tied to this change of SoC supplier.

Image damage, unfortunately, will be unavoidable, coming just a year after the Chinese charged Qualcomm with a mind-boggling $975 million for monopoly tactics and market abuse.

UPDATE: The previous version of this article stated that ARM was one of Qualcomm's competitors, which is not entirely correct. However, we do consider that SnapDragon 820 is made together with Samsung, as confirmed by multiple reliable sources. Also since Qualcomm dropped their collaboration with TSMNC it's clear that the only process manufacturer remaining is Samsung. The South Korean giant will manufacture the semiconductors themselves so any overheating issues of the future SnapDragon will most likely be eliminated.