Qualcomm Confirms 269 Layoffs As Data Center Ambitions Fade

Qualcomm is laying off 269 employees between its offices in San Diego, Calif., and Raleigh, N.C., as the semiconductor company’s data center ambitions continue to fade.

A company spokesperson confirmed the layoffs to CRN after The Information first reported on the job cuts Friday. But the spokesperson disputed that the layoffs only impacted Qualcomm's data center unit and said they were across "a number of divisions."

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"Qualcomm is reducing our investments in the data center business but remains committed to business obligations and upcoming compute opportunities at the edge of 5G networks and AI inference cloud solutions," the spokesperson said in a statement. "Qualcomm plans to continue supporting the HXT server joint venture in China. We are fully focused on executing on our 5G program."

Qualcomm's new round of layoffs will bring the company's data center unit to only around 50 employees, The Information reported, citing a person familiar with the decision. That will be a significant reduction from the roughly 1,000 employees who worked in the division earlier this year, according to the publication.

The layoffs are another sign of the company's diminishing ambitions to make a dent in the data center chip business that is dominated by Intel. The San Diego-based company had invested hundreds of millions of dollars on the initiative and had large tech companies like Microsoft and Hewlett Packard Enterprise lined up as customers, according to a Bloomberg report from September.

But the company's efforts were stymied by a failed hostile takeover attempt by Broadcom that convinced investors to pursue major cost-cutting initiatives, and attempts to save the unit through a buyout also failed, according to Bloomberg. The Information reported that Qualcomm's legal battle with Apple has also been a factor.

The layoffs affect roughly 144 employees in Raleigh and roughly 125 in San Diego, according to WARN notices filed with the states of North Carolina and California, respectively. The terminations are set to begin in February 2019. The company spokesperson said laid-off employees have received severance packages.