Qualcomm’s (QCOM) next chapter may be measured in more than chip sales. The company generated $9.9 billion in revenue for the third quarter of fiscal 2026, down 4% year-over-year (YOY), while handset revenue fell 20% YOY. Those declines put the company's reliance on smartphones and efforts to expand beyond them in sharper focus.
Now, workforce reductions are entering the picture. CEO Cristiano Amon reportedly told employees that Qualcomm is planning a global “performance-focused" reduction with notifications expected to begin in November.
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The planned job cuts come as Qualcomm works to build businesses beyond smartphones. Could a leaner operation help strengthen earnings while supporting that expansion? Or do the reductions point to deeper challenges? Let’s take a closer look.
What Qualcomm’s Numbers Say
Headquartered in San Diego, California, Qualcomm has a market capitalization of approximately $184.5 billion. The company designs semiconductors and develops wireless technologies for smartphones, vehicles, computers, and connected devices, while licensing patents that support mobile communications networks around the world.
Shares of QCOM stock closed at $172.83 on Oct. 22. So far, the stock has gained roughly 2% year-to-date (YTD) and 3% over the past 52 weeks.
www.barchart.com At 20.1 times trailing earnings, Qualcomm looks cheaper than the sector, although its PEG ratio of 4 times exceeds the roughly 1.2 times median, indicating a growth-adjusted premium. Qualcomm also pays an annualized dividend of $3.68 per share, offering a yield of 2.07%.
Qualcomm released its Q3 fiscal 2026 results on July 29. Revenue fell 4% YOY to $9.95 billion but exceeded the $9.66 billion analyst estimate. Adjusted earnings reached $2.21 per share versus the consensus estimate of $2.22. This meant that Qualcomm beat revenue expectations but essentially matched earnings forecasts.
The company forecast revenue of $10.1 billion at the midpoint for the next quarter versus analysts' $10 billion estimate. Meanwhile, its adjusted EPS guidance of $2.15 at the midpoint is below expectations of $2.38 for the period.
CEO Cristiano Amon cited “unprecedented memory prices,” higher manufacturing and input costs, and supply shortages. The pressures reduced handset revenue and weighed on QCT gross margins.
Qualcomm nevertheless reported strong growth in industrial networking and robotics. Its design-win pipeline exceeded $7 billion, with more than $3.5 billion in new design wins secured this year. The pipeline represents opportunities for future revenue rather than sales already recorded.
Qualcomm’s Growth Commitments
Qualcomm is planning worldwide “performance-focused” layoffs following annual employee reviews, with notifications beginning in November, according to an internal memo. Amon reportedly told staff that the company wants a “stronger performance culture” after having ”consistently fallen short of expectations.”
The memo did not specify how many jobs would be affected, and Qualcomm did not immediately respond to a request for comment. As of September 2025, Qualcomm employed approximately 52,000 people globally.
The planned cuts come alongside investments that could broaden Qualcomm’s revenue base. On Sept. 23, the company agreed to acquire PickNik Robotics. PickNik's MoveIt software helps robotic arms plan movements, avoid collisions, and manipulate objects, while its commercial MoveIt Pro platform supports developing and deploying robotics applications.
On Sept. 24, Qualcomm also announced a renewed global patent license agreement with Apple (AAPL), effective April 1, 2027. That agreement preserves the two companies' licensing relationship, although financial terms were not disclosed.
Meanwhile, Qualcomm announced a multigenerational collaboration with Amazon (AMZN) on Sept. 8 covering customized artificial intelligence (AI) inference silicon and optical connectivity reaching 1.6 terabits per second. Qualcomm’s SerDes and optical digital signal-processing technologies will “support high-bandwidth interconnects within Amazon data center networks.” The company also plans greater use of AWS infrastructure, including Amazon Bedrock, for electronic design automation (EDA) to shorten chip-design cycles.
Qualcomm is tightening staffing while committing resources to new businesses, making execution central to its investment case. That said, investors still need to know how much the cuts could save and when the company's investments could contribute meaningfully to earnings.
Where Does Wall Street Stand on Qualcomm Stock?
Qualcomm is scheduled to report earnings on Nov. 4, after the market closes. Wall Street expects EPS of $1.46 for the September quarter, down 43% YOY from $2.56 per share.
Still, RBC Capital Markets views Qualcomm’s Amazon partnership as a “foothold” in the AI data-center market. RBC Capital maintained a “Sector Perform” rating on QCOM stock while raising the price target from $160 to $180, implying potential upside of 3% from current levels.
The broader analyst outlook is more positive, with 34 analysts giving Qualcomm a consensus “Moderate Buy” rating. The average price target of $199.38 implies potential upside of approximately 14% from here.
www.barchart.com Conclusion
Qualcomm will likely begin notifying employees of cuts in November, but the scale and potential savings remain unclear. The reductions could help control costs, though weaker earnings expectations suggest a quick turnaround is unlikely. Robotics, Amazon’s AI infrastructure partnership, and Apple licensing give the company reasons to look beyond its immediate pressures. The most likely path is gradual progress rather than an immediate rebound. Qualcomm still has room to recover, but stronger earnings will matter more than cuts alone.
On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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