Qualcomm is reducing company cost by $1.4 billion following a drop in revenue, and announced that it has been considering splitting up its two business units.

"We are making fundamental changes to position Qualcomm for improved execution, financial and operating performance," says Steve Mollenkopf, CEO of Qualcomm.

The company will be implementing a radical cost-cutting plan to lower its annual cost from $7.3 billion dollars, thereby reducing its workforce by 15 percent. This means that about 4,500 employees will be losing their jobs — by far the largest job reduction in the company history.

Qualcomm, whose shares are down by 14 percent this year, fell to 1.8 percent to $63.05 at the close, Wednesday, The Financial Express reported.

The chipmaker's net income fell to $1.2 billion (73 cents a share), while the sales dropped 14 percent to $5.8 billion. The company's shares dropped to more than 20 percent over the past year.

"It's undeniable they're losing share-lots of it," says Stacy Rasgon, Sanford C. Bernstein and Co. analyst. "They've got to take cost out."

Despite the fall in revenue, Mollenkpof said that they would continue to invest in new products. They have also allotted about $4 billion annual budget for research and development.

In addition, the company announced a partnership with Jana Partners, as per CNBC. CEO of Palo Alto Networks Inc. Mark McLaughlin, Tony Vinciquerra, a former executive of Fox Networks Group Inc., and an independent director yet to be announced, will be added in Qualcomm's board of directors as part of the agreement.

Meanwhile, the company is currently reviewing the possibility of splitting its two main business units - one that designs chips and the other one that collects smartphones patent-license fee.

Mollenkopf previously said that these units complemented each other. At this point, the company is just taking a fresh look, Live Mint has learned.

A split would only make sense if it's part of a transaction, wherein one of the businesses was sold or merged with another company, according to Berstein's Ragon.