According to a story from China Business News, Qualcomm has recently started laying off workers at its Shanghai office. The U.S. chip giant didn’t say how many people were let go, but it did put an end to rumors that it would close a lot of offices or leave Shanghai completely.
The company is making this move as relations between the US and China in technology are getting worse and the economy is unclear.
Qualcomm has interestingly a lot of business in China, with offices in 12 places. Sales dropped 23% year-over-year to $8.45 billion for the three months ending June 25 due to lower demand for consumer gadgets. At the same time, the company put people out of work.
An unnamed worker said that layoffs have started, but they are still not very big. The company’s August stock exchange report shows that this move is part of a larger plan to restructure.
Qualcomm’s work in China is especially interesting because it has a big impact on the country’s progress in mobile phone technology. And Qualcomm is a big seller to Apple. The launch of the iPhone 15 in mainland China could help the company deal with some problems it’s having.
A lot of U.S. chip companies are cutting back on R&D in China right now, including Marvell Technology, which did the same thing earlier this year because the economy was bad.
In China, sales of smartphones dropped 4% year-over-year in the second quarter of 2023, according to Counterpoint statistics. This was the lowest level of sales since 2014 in China.
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