Qualcomm halts UMB project, sees no major job cuts
NEW YORK |
NEW YORK Nov 13 (Reuters) - Qualcomm Inc (QCOM.O) has stopped development of Ultra Mobile Broadband (UMB), its next-generation, high-speed wireless technology, and has been making small-scale layoffs as it looks to cut costs in the weakening economy, Chief Executive Paul Jacobs said.
But Jacobs told analysts at an annual investor conference on Thursday that the wireless chip developer does not expect massive layoffs because it sees a modest market recovery in the second half of 2009.
"We don't have plans to do a large layoff across the company," he said.
Instead, Qualcomm is carefully choosing which technologies it invests in.
For example, it decided to stop development of UMB as big service-provider customers, such as Verizon Wireless, have chosen a rival technology called Long Term Evolution for its next-generation high-speed network.
Jacobs said the company was putting resources into LTE technology instead.
Qualcomm issued weaker-than-expected full-year forecasts last week, leading some investors to question how sure it could be of its outlook in the difficult economic environment, RBC Capital analyst Mark Sue said.
Jacobs conceded that forecasting was difficult.
"We're trying to do as good a job as we can predicting the market. With that said, there's still some uncertainty out there," he said.
After opening the meeting by joking "Wasn't fiscal 2008 a nice time?" Jacobs said he was still seeing growing demand for advanced cell phones, putting Qualcomm in a good position as it sells technology licenses as well as chips.
"We're looking at difficult times in the near term but the long-term strength of the company is strong," he said.
Shares of Qualcomm rose 1 percent to $32.90 on the Nasdaq. (Reporting by Sinead Carew, editing by Matthew Lewis)
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