Qualcomm Job Cuts Come as It Shifts Investment Toward AI Computing

Qualcomm is preparing worldwide job cuts while it redirects its business toward data center and edge computing markets. The company expects to notify affected employees in November, after its annual performance reviews. The scale and departmental reach of the cuts remain unknown, leaving open how the reductions will affect the engineering teams needed for its newer businesses.

CEO Cristiano Amon described the plan as a “performance-focused reduction” in a memo reported by Reuters. He said Qualcomm would consider organizational needs, business priorities, and employees’ skills and expertise when deciding which positions to eliminate. Amon also wrote that the reduction would address employees who had “consistently fallen short of expectations.” The memo did not name specific groups or provide a headcount target.

A workforce decision amid weaker handset results

Qualcomm had roughly 52,000 employees at the end of its 2025 fiscal year, which typically ends in late September. The company’s mobile chip business remains central to its operations, with customers including Apple, Xiaomi, and Samsung. But demand for consumer electronics has weakened across the industry as higher memory costs put pressure on sales, particularly for lower-cost devices. Rising memory costs have contributed to a decline in the budget smartphone market.

Qualcomm’s recent results show the pressure on that core business. In its third-quarter 2026 results, revenue fell 4% year over year and net income dropped 25%. Handset revenue was down 20% from the same period a year earlier. The figures do not by themselves establish why the company chose to cut jobs, but they arrive as Qualcomm seeks to broaden its sources of growth beyond phones.

Its share price rose 1.5% in 2026, compared with a gain of almost 60% for the Philadelphia Semiconductor Index. That gap provides a measure of how differently investors have valued Qualcomm and the wider chip sector over that period; it does not indicate how the company’s new products will perform.

New markets need different skills

Qualcomm has been expanding its focus to AI infrastructure and edge computing, following a wider shift among semiconductor companies. In October 2025, it unveiled the AI200 and AI250, accelerators designed for AI inference. The company has also pursued data center technology through its purchase of Alphawave Semi, whose high-speed wired technology Qualcomm said would support its data center expansion.

Those moves add to possible growth areas that include automotive platforms, personal computing, and edge devices. Each market calls for expertise beyond the capabilities Qualcomm has built around mobile processors. Amon described the shift in staffing needs directly: “As we have expanded the business, so have the competencies and skills we require.” He added that the company needed “the right people in the right roles” for employees to perform well and the business to succeed.

A performance-based reduction could change which teams and skills Qualcomm retains, but the available details do not show how it will do so. Without a count of positions or a list of affected groups, it is not possible to tell whether the cuts will mainly remove overlapping work, reduce teams under pressure, or reshape the workforce around new products. Qualcomm also has not said how the planned job reductions relate to the $97 million in severance-related restructuring charges it reportedly recorded during the first nine months of its fiscal year.

AI investment and competition for chip talent

Qualcomm’s strategy reflects a tension facing parts of the technology sector: companies are reducing some roles while seeking people with skills tied to AI and chip production. Meta, for example, announced plans to cut 8,000 jobs to fund AI infrastructure. At the same time, semiconductor businesses are competing for process engineers, chip designers, and AI software developers.

Estimates cited from McKinsey and the SEMI Foundation suggest the United States could face a shortfall of as many as 157,000 semiconductor workers by 2030. The same source reports that 73% of chip companies have difficulty filling engineering roles. Those figures describe a wider workforce challenge; they do not reveal how many Qualcomm employees have the skills the company will need or whether the cuts will make hiring for its growth areas harder.

Qualcomm has said it expects data center growth to offset lost revenue by fiscal year 2027, after its latest earnings outlook projected lower quarterly profits than initially estimated. That expectation puts greater weight on execution: the AI accelerators and related data center technologies must find customers and contribute meaningful growth while the handset business faces declining revenue. The November notifications should provide the first concrete indication of how Qualcomm is balancing workforce reductions with the specialized expertise its expansion requires.