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ECONOMY: San Diego Is a Clear Winner as Qualcomm's Stock Surges

Updated: May 16, 2019

After more than two years of litigation, Apple and Qualcomm settled on April 16. The deal bore good news for Qualcomm; the company’s stock jumped more than 35 percent on the announcement.

The end of a royalty dispute that bogged down Qualcomm Inc., one of San Diego’s largest employers, looks to be a win for the region.

Qualcomm, the bedrock of the local tech scene, added $26 billion to its market cap within 36 hours of settling with Apple Inc. The companies agreed to a six-year deal where Qualcomm will supply chips for Apple’s mobile devices.

The deal looks to increase the company’s headcount in San Diego, if past inflection points are any guide. Notably, last year Qualcomm shed nearly 1,400 local workers, part of a cost-cutting initiative to fend off a hostile takeover attempt from Broadcom. Now, Qualcomm appears primed to go into hiring mode locally, according to Jerry McMillin, a managing partner with Proven Recruiting.

McMillin said recent social media postings and his sources indicate the company is looking to contract internal recruiters.

“They started looking for those people in the last eight to 10 hours,” said McMillian. “So it’s directly correlated to the settlement.” He declined to venture a guess of how many workers Qualcomm could add.

Close Ties

Qualcomm spokeswoman Clare Conley declined to comment on whether Qualcomm plans to hire following the settlement. But she indicated Qualcomm’s fortunes are tied to San Diego.

“Qualcomm is obviously a big part of San Diego, and so a strong Qualcomm, is a stronger San Diego,” Conley wrote in an email.

Qualcomm last year had a $4 billion economic impact on San Diego’s economy, when factoring in its workforce, company spending and ripple effects, according to a recent study from San Diego Regional Economic Development Corp.. That’s the equivalent of 41 Breeders’ Cup World Championships, 27 San Diego Comic-Cons and 3.6 San Diego Convention Centers, the study said.

Qualcomm’s 10,030 employees, per the regional EDC, accounted for about 12 percent of the region’s local tech talent. Spending from Qualcomm’s employees and the ecosystem around the company translated into an additional 17,850 jobs.

“For every job at Qualcomm, an additional 1.8 jobs are supported elsewhere in the San Diego economy. It truly is the job multiplier — integrating other companies and industries to provide support and collaboration that leads to industry-leading technology,” the study said.

The $4 billion economic impact fell 18 percent compared with the EDC’s study of the prior year, before the layoffs.

Even when Qualcomm sheds workers, that’s not always a bad thing for the region.

Peter Callstrom, CEO of the San Diego Workforce Partnership, said former Qualcomm employees have propelled startups and midsized companies hungry for tech talent. The workforce partnership has helped place some of these employees.

Philanthropic Impact

Beyond jobs, the company’s philanthropic efforts include its Thinkabit Lab, which helps prepare San Diego middle schoolers for careers in tech. And Qualcomm is so enmeshed in San Diego that many of the region’s institutions bear the company’s name, or that of company titans.

McMillin of Proven Recruiting said San Diego’s tech scene still revolves around Qualcomm, even with Apple, Walmart Labs and others recently expanding in San Diego. If Qualcomm does indeed go on a hiring spree, McMillin said, the company, like others, faces a scramble for tech employees.

“Their searches would be competitive. This is a candidate-driven market, especially for tech talent,” McMillin said.

San Diego County’s unadjusted unemployment rate dipped to 3.5 percent in February, according to the California Employment Development Department.

Kanani Breckenridge, CEO of recruiting firm Kismet Search, added her voice to the chorus of those who expect the settlement to boost San Diego. “Having this settled is going to be a big boon for Qualcomm and San Diego,” she said.

Article By: San Diego Business Journal

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