Qualcomm to axe 15 per cent of workforce, slash costs, and could split business

Chipmaker wants to reduce spending by $1.4bn and is taking a fresh look at the corporate structure of the business

Chipmaker Qualcomm has said that it will try to cut costs and jobs and may even have to break itself up as it delivered yet another profit warning to investors.

The firm, which makes the Snapdragon processor used in smartphones made by Samsung, HTC and ZTE, said that it wants to reduce spending by $1.4bn (£900m), cut about 15 per cent of its workforce - or 4,500 full-time staff - and increase capital returns to shareholders.

The US firm has been hit by rising competition from Asia, and many of its major shareholders, such as Jana Partners, have been pressuring it to split the chip-making side of the business from its patent-licensing business, which has fared better in recent times.

But it's not just the likes of Taiwanese firm MediaTek that have hit Qualcomm's profits: Samsung has decided to make its own processor instead of using the Snapdragon for its Galaxy S6.

In an interview with Reuters, Qualcomm president Derek Aberle said: "We decided we were going to take a fresh look at the corporate structure of the company," adding that the firm has looked into its options several times in the past decade.

Qualcomm shares dropped 1.8 per cent to $63.05 on Wednesday, meaning that it has suffered a staggering 20 per cent fall in its share value over the past year.

The company has cut its full-year revenue forecast, in its third profit warning of the year.

The chipmaker said its net income had fallen by 47 per cent in the third quarter, while revenues fell 14.3 per cent to $5.83bn, both below Wall Street expectations.