US chip-major Qualcomm (NASDAQ:QCOM) has refuted claims of shutting down its research and development (R&D) facility in Shanghai, China, despite admitting to plans for downsizing due to economic uncertainties and wavering demand. The company clarified its position on Monday, emphasizing that there are no plans for large-scale job cuts at the Shanghai facility, which employs nearly 393 employees.
The Shanghai R&D center, a multi-million dollar facility situated in the Zhangjiang Hi-Tech Park, opened in 2010. Qualcomm also maintains another R&D facility in Beijing. The company reassured that while some downsizing measures are scheduled for the fiscal fourth quarter, these would not result in a widespread reduction of the workforce.
In August, Qualcomm had warned of a potential decline in smartphone sales and possible job cuts. This warning was followed by an announcement during its fiscal third quarter earnings call ended June 25, where President and CEO Cristiano Amon expressed a conservative view of the market. Amon emphasized that Qualcomm would be "proactively taking additional cost actions to ensure it is well positioned to deliver maximum value for stockholders in an uncertain environment".
The company's recent financial performance mirrored these concerns. Qualcomm reported revenues of $8.4 billion in the fiscal third quarter, marking a 23 per cent year-over-year drop. Its net income also decreased by 52 per cent to $1.8 billion, primarily attributed to the ongoing slump in the smartphone industry.
While the downsizing measures are expected to entail significant additional costs for Qualcomm, the company maintains that these actions are necessary given the current economic climate and market uncertainties.
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