Qualcomm plans to lay off 15 percent of its workforce

Chipmaker to update board, business structure in order to improve performance following massive drop in last quarter

Photo by: AP
Photo by: AP

Updated Jul 28, 2015

Qualcomm says it will cut jobs, update its board and review its business structure as part of an effort to improve its performance.

The announcement comes as the wireless technology company reported a massive drop in its third-quarter revenue and profit and gave a weak quarterly outlook.

Qualcomm said Wednesday that it plans to slash its spending by $1.4 billion. This includes a 15 percent reduction in its workforce. At last count, the company had 31,300 employees.

The San Diego-based company has been under intense pressure recently from Jana Partners, a major shareholder, to make changes. The company will add two Jana Partner picks to its board immediately and plans to add a third, with both Qualcomm and Jana's approval, soon.

Qualcomm Inc. also said Wednesday that its net income fell 47 percent to $1.18 billion, or 73 cents per share, for its most recent quarter.

Revenue fell 14 percent to $5.83 billion in the period, also exceeding Street forecasts, which were at $5.77 billion.

Qualcomm said it expects to earn 75 cents to 95 cents for the current quarter. Analysts had forecast adjusted earnings per share of $1.07.

The company also gave a weak revenue forecasts, anticipating revenue between $4.7 billion and $5.7 billion for the fiscal fourth quarter.

Qualcomm expects full-year earnings in the range of $4.50 to $4.70 per share, with revenue ranging from $24.5 billion to $25.5 billion.

The company's shares fell nearly 3 percent in extended trading following the announcement. Its shares have fallen 14 percent since the beginning of the year, while the Standard & Poor's 500 index has increased nearly 3 percent.