Semiconductor manufacturing company Qualcomm is reportedly preparing to initiate group-wide layoffs as part of cost-cutting measures.

The company’s decision, which will impact 5% of its staff, was attributed to falling sales and a sector-wide slowdown, reported Business Today, citing sources.

Additionally, those with knowledge of the situation said that the majority of the cuts would affect the tech giant’s mobile division.

The mobile division of Qualcomm will let go around 20% of its workforce, they added.

A source told Business Today that the company has been facing challenges because of a decline in smartphone sales.

During the first quarter earnings call in February this year, Qualcomm president and CEO Cristiano Renno Amon said the company anticipates that high channel inventory levels will continue in the first half of 2023 due to fall in demand in the handset industry.

Furthermore, weaker-than-expected demand and high inventory levels were reported across several IoT end industries.

Amon added: “Given the current macroeconomic and demand environment, we are implementing further spending reductions and streamlining operations without losing sight of the significant growth and diversification opportunities ahead.

“Combined with the actions we have already taken in the quarter, we expect to reduce non-GAAP operating expenses by approximately 5% relative to a run rate exiting fiscal ’22.”

In the quarter that concluded in December 2022, Qualcomm’s net income decreased 34% year-on-year (YoY). The company’s sales decreased by 12% from the previous year.

Last week, e-commerce giant Amazon commenced layoffs across its cloud services and human resources division.

The most recent round of layoffs is a result of a previously planned retrenchment effort that will affect 9,000 workers.

Amazon undertook a separate round of layoffs earlier this year that affected around 18,000 employees.