(Yicai) Sept. 22 -- Qualcomm has rebutted internet rumors that the US chipmaker will close its research and development facility in Shanghai and pull out of the Chinese city.

Online claims about Qualcomm closing its Shanghai R&D center, quitting the city, and making large-scale staff layoffs are false and overblown, the California-based company told Yicai yesterday, while also admitting that it does plan to downsize given uncertainties about the economy and demand.

Its multi-million dollar R&D center in Shanghai, a major hub for technology talent, opened in the Zhangjiang Hi-Tech Park, one of China's premier high-tech industrial parks, in 2010 and has 393 workers, according to corporate information platform Tianyancha. Qualcomm also has an R&D facility in Beijing.

Staff redundancies and other downsizing measures are mainly scheduled for the fiscal fourth quarter and will entail significant additional costs, Qualcomm pointed out. These steps will likely wrap up in the fiscal first half of next year, it added. 

The layoffs may be connected with Qualcomm's declining performance. Net profit tumbled 52 percent to USD1.8 billion in the three months ended June 25 from a year earlier, it said early last month. Revenue fell 23 percent to USD8.5 billion.

Consumption of parts for handsets and other electronic products will remain lower until the end of this year, Qualcomm said on its earnings conference call in August, and the firm is taking steps to cut costs and will likely let go more employees. Its adjustments in China are part of those measures, Qualcomm told Yicai.

Mobile chips are an important pillar of Qualcomm’s business, but handset sales have stagnated globally over the past two years. Smartphone sales fell 8 percent last quarter from a year ago and dropped 5 percent from the first quarter, declining for eight straight quarters, data from Counterpoint Research showed.

Shares of Qualcomm [NASDAQ: QCOM] closed down 1.2 percent at USD107.96 apiece in New York yesterday.

Editors: Shi Yi, Martin Kadiev