In response to a challenging economic climate and dwindling demand, Qualcomm (NASDAQ:QCOM) has initiated a strategic restructuring plan that includes the laying off of 1,258 employees, approximately 2.5% of its entire workforce. The majority of these layoffs will occur in California, specifically affecting 1,064 employees from their San Diego office and 194 from their Santa Clara location.

This decision follows a steep decline in mobile chip sales, as reported in their Q3 2023 results, which showed a significant drop to $5.26 billion. Furthermore, Qualcomm’s net income experienced a substantial decrease of 52% within the same period. The company anticipates that the restructuring process will be completed by the first half of fiscal 2024.

Adding to the company’s challenges is the sluggish economic recovery in China, which has led Qualcomm to forecast a further high-single-digit percentage decrease in handset sales. This forecast reflects the broader economic uncertainty that is impacting both Qualcomm and the global tech industry at large.