American semiconductor manufacturer Qualcomm has reportedly begun a major global workforce restructuring exercise, with up to 1,000 jobs potentially at risk across its Indian operations alone as the company adjusts to mounting pressures in its smartphone business and accelerates investments in artificial intelligence (AI) and data-centre chips.
The reported job cuts are part of a broader exercise that could reduce Qualcomm’s global workforce by approximately 7%.
Although the company has not officially confirmed the scale of the latest layoffs, media reports suggest that the restructuring could affect around 3,600 employees worldwide.
Qualcomm employs approximately 52,000 people globally, with India accounting for a significant portion of its workforce.
The company reportedly has around 20,000 employees across Bengaluru, Hyderabad, Delhi-NCR and Chennai, making the South Asian country an important centre for Qualcomm’s engineering, research and technology operations.
While Qualcomm has not issued an official statement confirming the number of employees affected or providing a detailed breakdown of the restructuring exercise, reports suggest that affected employees have been offered severance packages comprising approximately three months’ salary, alongside additional compensation based on their tenure with the company.
Employees who complete and sign their separation documents within a specified period have reportedly been offered an additional month’s salary as an incentive for accepting the exit terms early.
The reported restructuring comes at a challenging time for Qualcomm’s core semiconductor business, particularly its smartphone division, which continues to account for a substantial share of its revenue.
Qualcomm’s smartphone chip sales have missed Wall Street expectations and the decline threatens to wipe out more than USD 17 billion in market value if the losses are sustained.
Qualcomm is facing a difficult combination of rising memory costs and weaker smartphone demand, as the growing appetite for AI infrastructure absorbs semiconductor supply across the industry.
The company’s September-quarter results highlighted the pressure on its traditional handset business.
Revenue from its smartphone division declined 26% year-on-year to USD 5.14 billion, while total sales from its chip segment fell 8% to USD 9.02 billion.
Higher memory costs have also emerged as a concern for smartphone manufacturers, potentially affecting production expenses and consumer demand.
Chief Executive Officer Cristiano Amon told Reuters that Qualcomm had anticipated the memory shortage and prepared for it earlier than some competitors.
He also pointed to sequential improvement in Android demand and the company’s progress in expanding beyond its traditional smartphone business.
Nevertheless, analysts remain cautious about how quickly these emerging businesses can compensate for weakness in the handset market.
Morgan Stanley analysts questioned the sustainability of Qualcomm’s ambitions in the AI semiconductor market, particularly as the company transitions from developing custom processors to broader merchant chip solutions.
The brokerage concerns reflect a wider challenge facing semiconductor manufacturers: securing a position in the expanding AI infrastructure market while maintaining profitability in their established businesses.
Qualcomm was also trading at a relatively lower valuation than some semiconductor competitors last week, with the chipmaker’s forward price-to-earnings multiple standing at 16.78, compared with 25.41 for MediaTek and 33.28 for Intel.
At least 10 brokerages lowered their price targets on Qualcomm following its latest financial results, according to LSEG-compiled data.
Despite the pressure on smartphone-related revenue, Qualcomm is increasingly positioning itself as a potential beneficiary of the global AI infrastructure investment boom.
Since 2025, the company has been spending a great deal of its energy approaching cloud service providers with customised AI processors as major technology groups explore alternatives to Nvidia’s expensive semiconductor solutions and develop more in-house computing capabilities.
While Qualcomm expects its data-centre chip business to generate USD 15 billion in annual revenue by 2029, it has already secured a significant agreement with Amazon, announced in September, allowing the technology giant to purchase up to USD 60 billion worth of Qualcomm’s AI data-centre chips and related products.
The agreement also includes warrants that would allow Amazon to purchase Qualcomm shares.
Microsoft and Meta have also supported Qualcomm’s expansion into data-centre processors through orders for its chips.
Alphabet’s recent investment has provided another boost to the company’s broader growth strategy, with Google reportedly building a stake worth nearly USD 548 million in Qualcomm during the third quarter, strengthening the financial relationship between two companies that have worked together for years.
Qualcomm processors have traditionally powered a substantial portion of smartphones running Google’s Android operating system.
More recently, the companies collaborated on Google’s premium Google Book laptop lineup, which uses Qualcomm processors.
Their partnership also extends into automotive technology. In 2024, the two companies reached an agreement to develop chips and software supporting the adoption of AI in vehicles.
Alphabet’s investment comes as Qualcomm attempts to establish itself as a significant supplier to the AI computing market, where demand for specialised processors is rapidly increasing.