Qualcomm, San Diego's largest for-profit, private sector employer, said today it will have a 15-percent company-wide reduction in employment, but it hasn't said how many of those cuts will be in San Diego.
The rumor mill had the company chopping about 12.8 percent of employment. At 15 percent, there would be about 4,500 jobs lost. The reason for the larger head-chopping is obvious: throughout a conference call with analysts this afternoon, chief executive Steve Mollenkopf kept repeating the Wall Street buzzwords: "maximize shareholder value," "create stockholder value," and "drive stockholder value."
The company intends to reduce total spending by $1.1 billion, and that doesn't include an annual $300 million reduction in stock-based compensation grants.
The company is adding three new faces to its board, including one that will specifically please Jana Partners, the hedge fund with a $2 billion stake in the company. Jana has been bugging Qualcomm to take measures to run up its stock.
The company's earnings are dismal, as expected. In the third quarter, sales dropped by 14 percent, net income plunged by 47 percent and earnings per share declined 44 percent. The company touted its strategic realignment plan, which may include a splitting up of the company, as Jana desires.
Wall Street was not impressed. During the regular trading day (which was weak for the overall market), Qualcomm stock dropped 1.46 percent to $64.19. In after-hours trading, the stock dropped another 1.85 percent to $63.