Press Release

Qualcomm Announces Measures To Enhance Competitiveness

Feb 2, 1999SAN DIEGO

Qualcomm products mentioned within this press release are offered by Qualcomm Technologies, Inc. and/or its subsidiaries.

SAN DIEGO -- February 2, 1999 -- As part of its ongoing efforts to improve its overall profitability and competitiveness, Qualcomm Incorporated (NASDAQ: QCOM) today announced that as a result of a company-wide evaluation, the Company is reducing its workforce by eliminating approximately 700 positions. Of the positions that were eliminated today, approximately 220 are temporary positions. In addition to the 700 positions eliminated, another 250 positions from the Infrastructure Division have been redeployed to other divisions, including increasing the engineering team in ASIC Products. As a result of these actions, the Company expects to incur a one-time charge of up to $20 million in the second quarter of fiscal 1999 ending March 28,1999.

"It is very difficult for us to eliminate positions, recognizing the uncertainty and disruption this causes affected employees and their families," said Dr. Irwin M. Jacobs, chairman and CEO of Qualcomm. "However, we believe that the current reduction, combined with other cost-cutting measures, is necessary to assure our competitive position in the rapidly growing wireless communications market. We are committed to making the transition as smooth as possible for impacted employees. The Company will offer comprehensive support and assistance, as well as career counseling, to affected employees."

Reductions were made throughout the Company at all divisions and levels following a comprehensive staffing and cost-benefit review. Most of the reductions were in the Wireless Infrastructure Division, which has been reduced by approximately 35 percent since the beginning of fiscal 1999. The reductions were designed to strengthen the operations of the Wireless Infrastructure and Communications Systems Divisions, which were recently combined to form Qualcomm Wireless Systems. The reductions were carefully considered to allow the new division to continue to fully support its existing customers and key CDMA infrastructure products, as well as the Globalstar™ system. Development activities will focus on the Company's new family of compact base stations, the first units of which have been installed under contract with U S WEST. The Company will also continue to explore possible alliances with other infrastructure manufacturers.

"Today's reduction is one of a number of measures designed to raise operational efficiency and enhance shareholder value," said Richard Sulpizio, president and chief operating officer of Qualcomm. "By reducing our expenses and reprioritizing our development and sales activities, we expect to continue to improve the performance of our overall business and be well positioned for even greater growth as world economic conditions improve."

Qualcomm's actions follow a period of rapid growth, from an employee base of 1,000 in 1993 to over 11,000. During this period, the Company successfully transitioned from a technology start-up focused on developing and commercializing Code Division Multiple Access (CDMA) technology to a global provider of telecommunications products. However, with financial problems impacting many regions of the world, changes are necessary for Qualcomm to remain a strong competitor in its global markets. After the reduction in workforce, Qualcomm will continue to employ approximately 10,500 people.

Qualcomm Incorporated (NASDAQ: QCOM) is a leader in developing and delivering innovative digital wireless communications products and services based on the Company's CDMA digital technology. The Company's major business areas include CDMA phones; Application Specific Integrated Circuits (ASICs); wireless infrastructure; technology licensing; and satellite-based systems including OmniTRACS® and portions of the Globalstar system. Qualcomm is headquartered in San Diego, Calif. Qualcomm's fiscal 1998 revenues exceeded U.S. $3 billion. For more information, please visit the Company's web site at

Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties, including timely product development, the Company's ability to successfully manufacture significant quantities of CDMA or other equipment on a timely and profitable basis, and those related to performance guarantees, change in economic conditions of the various markets the Company serves, as well as the other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended September 27, 1998, and most recent Form 10-Q.


Qualcomm and OmniTRACS are registered trademarks of Qualcomm Incorporated. Globalstar is a trademark of Loral Qualcomm Satellite Services, Incorporated.