Qualcomm slashes 1,500 jobs in California, and its NXP bid faces objections in China
Qualcomm Inc. is slashing at least 1,500 jobs in California, trying to cut costs, at the same time its $44-billion bid to acquire NXP Semiconductors is running into problems getting antitrust clearance from China.
The San Diego company, a leading provider of chips for mobile phones, said the layoffs included permanent and temporary workers.
The company — which employs 33,800 people worldwide, including about 13,000 in San Diego — has said it is looking to cut about $1 billion from its operating expenses to help boost earnings. It began notifying employees of the layoffs Wednesday. On Thursday, it revealed through a government-mandated notice that it is laying off 1,231 workers in San Diego and 269 in the Santa Clara and San Jose area.
“A workforce reduction such as this one affects not only those employees who are part of the reduction but their families, co-workers and the community,” a Qualcomm spokesperson said in a statement Wednesday.
“We recognize this and have offered affected employees supportive severance packages to reduce the impact of this transition on them,” the spokesperson said.
Qualcomm had set the cost-savings goal during its battle with rival chipmaker Broadcom Ltd., which made an unwanted $117-billion buyout offer for Qualcomm. The proposed deal was blocked by the Trump administration in March on national security grounds.
Qualcomm’s bid for the Dutch chipmaker NXP also appeared caught in the middle of growing disputes between the United States and China over trade and technology.
Gao Feng, a spokesman for China’s Commerce Ministry, told reporters in Beijing that Chinese officials “found Qualcomm’s plan has difficulty resolving the related market competition problems,” but he didn’t specify the nature of the objections.
Qualcomm then announced that it had withdrawn its bid for NXP and filed a new application. It wasn’t immediately clear what changes Qualcomm had made in hopes of satisfying Chinese concerns.
Both companies’ stocks tumbled Thursday. Qualcomm slid 4.8% to close at $52.57 a share, and NXP fell 5.2% to $107.17.
The stalled takeover bid follows escalating U.S.-China trade tensions, with President Trump threatening to impose tariffs on $150 billion worth of Chinese products and Beijing countering with threats to raise tariffs by 25% on more than 100 U.S. products exported to China.
Freeman writes for the San Diego Union-Tribune. The Associated Press was used in compiling this report.
Twitter: @PeltzLATimes
UPDATES:
2:20 p.m.: This article was updated with the number of Qualcomm layoffs and with closing stock prices for Qualcomm and NXP.
This article was originally published at 8:40 a.m.
