Defense job cuts hit UK harder than global rationalization • The Register
Arm reportedly cut around 20 percent of its UK workforce and canceled some of parent company SoftBank’s hiring commitments to the government when it bought the chip designer.
SoftBank agreed to double Arm’s 1,770 UK workforce when it bought the company in 2016 and hired 1,730 over the next half decade, bringing the local workforce to 3,500.
However, pointed out by the financial times, Arm has laid off 18 per cent of its global workforce of 6,950, with a disproportionate share in the UK. Arm has shed 20 per cent of its local workforce, or 700 jobs, which is just over 40 per cent of the hiring made in an attempt to double the size of the UK operation.
In the rest of the world, Arm has reduced staff by 550.
The process began in March, when the chip designer said it had to lay off between 12 and 15 percent of its workforce after Nvidia made a protracted and ultimately doomed $66 billion bid to buy the company.
Newly installed CEO Rene Haas said at the time that to remain competitive one had to eliminate duplication, “now that we are one arm”, stop further work on projects that are no longer crucial for the future and be more disciplined in administration take precedence over overhead costs.
Employees told the financial newspaper that the layoff process was exacerbated by an “exodus” of employees at Arm who were angered by the ongoing uncertainty surrounding the deal.
The Unite union has urged Arm’s management to reconsider the job cuts, claiming the company is targeting the jobs of skilled workers while imposing extra work on those left behind.
One investor told the FT: “Arm is about people and this is a business where you as an investor want to see some stability in staffing.”
The registry asked Arm for comment.
The chip designer said he was seeing “turnover rates in line with current industry norms” and had 525 vacancies, mostly in engineering, with 373 in the UK.
“Businesses across the technology sector are feeling the aftermath of the global pandemic and the resulting ‘great resignation’. We continue to hire and invest heavily in our engineering talent, with a focus on delivering a robust compute product roadmap that will empower our partner ecosystem to build the future on Arm.”
The company told us that its headcount is appropriate for the company’s “requirements following a restructuring earlier this year and the separation of Arm’s ISG business in 2021.
“We continue to hire and invest heavily in our technical talent and are confident we have the talent and teams to deliver a robust compute product roadmap that enables our partner ecosystem to build the future on Arm.”
The sector is still waiting to see where Arm will go public. The company is believed to prefer the New York Stock Exchange, but the UK government is hoping it can persuade SoftBank management to opt for a dual listing in London. The process should start before the end of the year, but the turmoil in global equity markets could force a delay.
Arm continues to be a shining light in SoftBank’s business, growing revenue 6 percent year over year to $719 million for the first quarter of fiscal 2023 ended June 30. That included $453 million in chip royalties, up 22 percent. Profit before income taxes, depreciation and amortization was $414 million, up 31 percent.
SoftBank reported a loss of $23.4 billion for the three-month period, caused by huge write-downs on valuations of investments made. ®
https://www.theregister.com/2022/10/05/arm_job_cuts_hit_uk/ Defense job cuts hit UK harder than global rationalization • The Register