Qualcomm Inc. has begun notifying workers of layoffs at the same time the San Diego chipmaker's $44-billion bid to acquire NXP Semiconductors is running into problems getting antitrust clearance from China.
Qualcomm, a leading provider of chips for mobile phones, did not specify the number of employees being let go but said the cuts included permanent and temporary workers.
The company _ which employs 33,800 worldwide, including about 13,000 in San Diego _ has said it is looking to cut about $1 billion from its operating expenses to help boost earnings.
"A workforce reduction such as this one affects not only those employees who are part of the reduction but their families, co-workers and the community," a Qualcomm spokesperson said in a statement Wednesday.
"We recognize this and have offered affected employees supportive severance packages to reduce the impact of this transition on them," the spokesperson said.
Qualcomm had set the cost-savings goal during its battle with rival chipmaker Broadcom Ltd., which made an unwanted $117-billion buyout offer for Qualcomm. The proposed deal was blocked by the Trump administration in March on national security grounds.
Qualcomm's bid for the Dutch chipmaker NXP also appeared caught in the middle of growing disputes between the United States and China over trade and technology.
Gao Feng, a spokesman for China's Commerce Ministry, told reporters in Beijing that Chinese officials "found Qualcomm's plan has difficulty resolving the related market competition problems," but he didn't specify the nature of the objections.
Qualcomm then announced that it had withdrawn its bid for NXP and filed a new application. It wasn't immediately clear what changes Qualcomm had made in hopes of satisfying Chinese concerns.
Stocks of both companies tumbled about 4 percent on Thursday morning, with Qualcomm falling to $53 a share and NXP sliding to $108.40 a share.
The stalled takeover bid follows escalating U.S.-China trade tensions, with President Trump threatening to impose tariffs on $150 billion worth of Chinese products and Beijing countering with threats to raise tariffs by 25 percent on more than 100 U.S. products exported to China.
The San Diego Union-Tribune and Associated Press were used in compiling this report.
