Qualcomm will cut 1,500 jobs amidst Apple legal battle

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Qualcomm
Qualcomm has been battling Apple since early 2017.
Photo: Qualcomm

Chipmaker Qualcomm is reportedly cutting around 1,500 jobs in an effort to reduce its costs by $1 billion. Most of these jobs will be in California, although some will be in other locations.

Qualcomm has been engaged in an ongoing legal battle with Apple since early 2017.

“We first evaluated non-headcount expense reductions, but we concluded that a workforce reduction is needed to support long-term growth and success, which will ultimately benefit all our stakeholders,” Qualcomm said in the statement. Altogether, the company employs 34,000 people.

Apple’s battle with Qualcomm

Qualcomm and Apple’s dispute kicked off when Apple sued Qualcomm for allegedly withholding $1 billion in rebates. This was the result of Apple assisting South Korean regulators investigating Qualcomm’s business.

Qualcomm then hit back at Apple by arguing that the Cupertino company had breached its contract. The subsequent decision by Apple to withhold royalty payments to Qualcomm then meant that Qualcomm was forced to revise its earnings forecasts to give a smaller number, due to Apple cutting off one of its major sources of revenue.

Apple’s manufacturers even got dragged into the fight, before things escalated further — with Qualcomm attempting to ban iPhones being imported to the United States that use chips, “other than those supplied by Qualcomm affiliates.”

2017 ended with Apple and Qualcomm filing lawsuits and counter-lawsuits against one another. Qualcomm sought a ban on the import of all AT&T and T-Mobile iPhone X and iPhone 8 units in the U.S. Meanwhile, Apple claimed that Qualcomm was infringing on its patents by using Apple tech in its Snapdragon mobile phone chips.

Qualcomm is struggling

Apple is supposedly replacing Qualcomm chips with ones made by Intel in its future devices. On June 27, Tim Cook will attend a deposition as part of Apple’s continuing legal battle with Qualcomm.

Amidst the ongoing drama, Qualcomm has struggled. Its bid to save money is an effort to stave off a hostile takeover from rival Broadcom, which was nullified by the Trump administration for security reasons. Sales have fallen each year since 2015, and are projected to decline 3 percent in fiscal 2018.

Source: Bloomberg