Qualcomm denied reports it plans to shut an R&D facility in Shanghai, but acknowledged it will reduce staff given weak demand for smartphones and a slowing economy in China, Yicai Global reported.

The vendor told the news agency it had no plans for large-scale job cuts at its Shanghai facility, which opened in 2010 and employs nearly 400 staff. But it noted it will trim its workforce, with the majority of cuts being made this quarter and the rest over the next six months.

Various news outlets reported last week the company’s operations faced mass layoffs in the mainland and Taiwan due to the ongoing slump in smartphone demand.

Qualcomm also has an R&D facility in Beijing.

US sanctions restricting the sale of advanced chips in China have hit Qualcomm’s business in the country, where major customers like Huawei have been forced to cut orders.

TF International Securities analyst Kuo Ming-Chi forecast Qualcomm will slash shipments to China by 50 million to 60 million chips, with Huawei accounting for the majority of the decline.

Kuo stated a Huawei shift to its own Kirin processors for the Mate 60 series means Qualcomm will lose those orders completely 2024, while the US-based company also faces the risk of a decline in shipments to non-Huawei Chinese clients moving to its silicon.

On an earnings call in early August, Qualcomm forecast a significant downturn in China, with overall revenue in the current quarter to drop and the company likely to cut jobs.