Qualcomm cuts 1,314 jobs in San Diego

Qualcomm slashed 1,314 full-time jobs in San Diego and hundreds of jobs elsewhere as it revamps its business in the face of slower growth in the maturing smartphone market.

The wireless chip giant gave 60-days notice on Thursday as required by the Worker Adjustment and Retraining Act (WARN.) For laid-off workers, their final day is Nov. 20.

The company said the notifications make up the bulk of the local job cuts that Qualcomm expects to make during its restructuring.

“A workforce reduction is never easy,” said Qualcomm President Derek Aberle in a statement. “The company is providing supportive severance packages, outplacement resources and career transition resources for those employees affected during this difficult time.”

In July, Qualcomm revealed plans to trim its 31,300 global workforce by 15 percent worldwide over the next year. It aims to cut expenses by $1.4 billion annually.

As of May, the company employed about 15,000 full-time, part-time and temporary workers in San Diego.

Some San Diego officials expected larger job losses – though attrition since the restructuring was announced may have reduced the need for a larger layoff.

Even so, laid-off workers may struggle to find jobs in the region at wages that match what they earned at Qualcomm, said Kelly Cunningham, economist for the National University System Institute for Policy Research.

“With engineering, it gets so specialized,” he said. “I have wondered if these workers are going to have a challenging time finding at least equal paying work in San Diego. It might require them to move to wherever they can find opportunities.”

Communications Equipment jobs totaled 27,822 last year in San Diego County, with an average annual wage of $133,500. Local job growth in the sector was just 2.4 percent, according to the state Employment Development Department.

“These are high paying jobs,” said Cunningham. “So to lose those has a ripple effect on other employment.”

Qualcomm confirmed that it cut 158 jobs in Boulder, Colo., 130 jobs in the Bay Area and 65 in Andover, Mass. – regions where it was required to submit 60-Day WARN notices.

The company declined to disclose layoff numbers at its dozens of international locations, so the job cuts revealed Thursday do not reflect all the reductions.

WARN notices are required for full-time employees only. Part-time and contract workers are not included.

Qualcomm said previously that it would make “significant reductions” in temporary or contract labor as part of the restructuring.

A company spokeswoman declined to release details of the severance for workers, other than saying all workers get 60 days notice and “supportive” exit packages.

Qualcomm has been stung this year after it lost key chips in Samsung’s newest flagship smartphone, the Galaxy S6. The company supplied the main processor, cellular radio and other technology to previous versions of the Samsung Galaxy line, and it is working to win Samsung back as a customer in next year’s version of the Galaxy.

In addition, increased competition and the maturing smartphone market has slowed growth for Qualcomm. Sales for the company’s fiscal year ending this month are forecast at about $25 billion, down from $26.5 billion in 2014.

In response, Qualcomm aims to grow by expanding mobile technology into new markets – such as connected cars, wireless medical devices, drones, robotics and the Internet of Things.

“We are in a position where we have to pivot the company,” said Chief Executive Steve Mollkenkopf in a recent interview. “Now we are working on where do we grow outside of the phone. A lot of what we are doing this year is repositioning the company’s resources so we can continue to deliver on the phone opportunity but more importantly deliver on these new opportunities.”

San Diego economic development officials are working with Qualcomm to help laid-off workers find jobs in the region.

Qualcomm has set up an Career Transition Center on its campus. It hired an outplacement services firm to aid employees with updating their resumes and other job hunting skills.

Startup organizations Connect and EvoNexus are participating to encourage would-be entrepreneurs to launch their own businesses.

EvoNexus is a nonprofit incubator. Chief Executive Rory Moore said his goal is to have two dozen new startups spawned from laid-off Qualcomm workers.

The San Diego Regional Economic Development Corp. is working to link ex-Qualcomm employees with local technology companies such as Illumina, ViaSat and iboss Cybersecurity.

“This is pretty much world class talent when it comes out of Qualcomm,” said Mark Cafferty, chief executive of EDC. “So if we can get the companies here engaged with that talent here.”