Qualcomm began a new round of job cuts on 11 November, with its Bangalore office among the first affected, according to multiple reports. The reduction is part of a global headcount programme announced earlier and could reach about 1,000 roles.
On 20 October, chief executive Cristiano Amon told staff in an internal memo that the company would adjust headcount worldwide after its annual performance review, with notices from November. He described it as a performance-led reduction intended to strengthen a performance culture. The company says the process accounts for business priorities, organisational needs and the skills it will require.
The quarter behind the decision
Fourth-quarter revenue was USD 10.322 billion, down 8 per cent, and non-GAAP revenue was USD 10.442 billion, down 7 per cent. Full-year revenue was USD 43.12 billion against USD 44.284 billion a year earlier, a decline of 3 per cent, and non-GAAP net profit fell 15 per cent to USD 11.311 billion.
The chip division, QCT, reported USD 9.015 billion in the quarter, down 8 per cent. Handsets inside it were USD 5.137 billion against USD 6.961 billion a year earlier, a fall of 26 per cent. Automotive reached USD 1.99 billion, up 89 per cent, and IoT USD 1.888 billion, up 4 per cent. For the full year handsets were USD 24.072 billion, down 13 per cent and still about 65 per cent of QCT.
Memory set the whole chain in motion
The handset decline did not start inside Qualcomm. AI data centre construction pulled HBM and server DRAM demand up, and memory makers moved capacity and resources towards the higher-margin AI products. Mobile LPDDR tightened in supply and rose in price.
Memory was always a line in a phone’s bill of materials. When it moves this fast it changes pricing, configuration and build plans. TrendForce forecast in February that global smartphone production could fall more than 10 per cent in 2026, and put the contract price increase for a mainstream 8GB plus 256GB configuration at close to 200 per cent year on year in the first quarter. In June Counterpoint cut its full-year shipment forecast to a decline of 13.9 per cent.
Phone makers have three options: raise prices, cut specifications and squeeze other components, or build fewer units and protect cash. All three land on the chip supplier. Qualcomm’s annual report says some major handset customers are adjusting production plans to reduce inventory specifically because of memory supply limits and price increases, and that it expects the pressure to keep weighing on demand and on its financial performance.
The Apple line is closing
The second structural problem is the loss of a flagship socket. Apple has been building its own modems and now uses them in volume. The iPhone 18 Pro runs the in-house C2 modem, and only the US version of the Pro Max still carries Qualcomm silicon. Reported plans for the twentieth-anniversary iPhone would put Apple’s third-generation modem across the US lineup, with Apple targeting better speeds and AI capability than Qualcomm’s part.
Amon said on the fourth-quarter call that the latest guidance no longer includes Apple modem revenue. That removes a share of the premium end of the market regardless of what happens to memory prices.
What the cuts actually cost
The restructuring was underway before it was announced. Qualcomm recognised USD 332 million of restructuring and related charges in fiscal 2026, against USD 39 million in fiscal 2025, an increase of about seven and a half times. Of that, USD 235 million, roughly 71 per cent, fell in the fourth quarter alone. The annual report states that almost all of the charges relate to severance. Headcount stood at about 57,000 across 38 countries and more than 200 offices as of 27 September.
Some staff in India have said publicly that they received no prior negative performance feedback before being told their roles were gone, with severance of one quarter’s salary plus service-based additions. A company can call a reduction performance-led and still have it decided by a spreadsheet.
The replacement businesses
The transition is real but early. Full-year automotive revenue reached USD 6.004 billion, up 52 per cent, and IoT USD 7.132 billion, up 8 per cent. Qualcomm signed a multi-generation agreement with Amazon covering AI data centre products, and Amon has said fiscal 2027 will be the inflection point for non-handset revenue, with growth above 60 per cent and data centre revenue reaching USD 5 billion.
That target puts Qualcomm against Nvidia and AMD in a market decided by architecture, software ecosystem, customer relationships and the ability to deploy at scale, not by modem integration. Handsets still supply about two thirds of QCT revenue, so the gap has to be closed while the base shrinks.
The cuts are the arithmetic of that gap. A company that grew on a per-phone royalty is now funding car platforms and data centre silicon out of a declining handset line, and it is doing so in the same year that memory prices took a third of the volume out of the market.
Editor’s note: This is an adapted translation of the original Sohu Tech report. It has been trimmed and restructured for readability for an international business audience. The full original (in Chinese) is at https://www.sohu.com/a/1100647839_115565.