Arm, the chip design firm that is one of the UK’s biggest technology companies, has announced it is to cut hundreds of jobs. The move comes in the wake of the collapse of its proposed $40 billion sale to U.S. chip giant Nvidia, which was blocked by regulators on competition concerns.
The Cambridge-based company explained the job cuts with the statement it is
“continually reviewing its business plan to ensure the company has the right balance between opportunities and cost discipline, Unfortunately, this process includes proposed redundancies across Arm’s global workforce.”
The redundancies will affect between 12% and 15% of Arm’s global workforce with the brunt being born in the UK and United States. The company is currently owned by the giant Japanese tech investment conglomerate Softbank, who took it private in a $32 billion deal in 2016.
However, following the collapse of the sale to Nvidia, Softbank plans to relist Arm as a public company. A listing in the USA is most likely though a dual listing in London could also be a possibility. The company is led by chief executive Rene Haas who assumed the role in February of this year following the abrupt departure of predecessor Simon Segars after regulators blocked the Nvidia deal. One of Mr Haas’s key jobs is to prepare the company for an IPO.
Arm employs around 6400 people globally with roughly 3500 of those position UK-based. Union bosses have reacted with concern at the news of job cuts with Prospect union general secretary Mike Clancy commenting the tech company is one of the
“most important providers of high-quality tech jobs in the UK” and the announcement would worry “thousands of Arm employees worried about their jobs”.
“We always knew there was a risk once the sale to Nvidia fell through that the company would seek to restructure or cut costs. We urgently need leadership from government now to protect British jobs and R&D spending.”
Arm was founded in 1990 as a joint venture between Apple and the British company Acorn Computers and is seen as arguably the most successful tech group to come out of the UK in recent decades. The company’s chip designs are licensed to and used by chipmakers and electronics companies such as Apple and Samsung to produce the processors used in their devices.
As IoT technology rapidly expands the range of devices that are connected and require microchips, the company is becoming an even bigger player in the semiconductor industry. The UK government had its reservations about the sale to Nvidia as it sees Arm’s ownership as strategically important to the UK. Regulators were worried Nvidia ownership would significantly reduce competition in the sector and potentially limit access to Arm chip designs despite the U.S. company insisting Arm would continue to operate independently.
A letter to staff from Mr Haas announcing the planned job cuts and seen by The Telegraph newspaper wrote:
“To stay competitive, we need to remove duplication of work now that we are one Arm; stop work that is no longer critical to our future success; and think about how we get work done. It’s essential that we focus on activities that will move our strategy forward at pace.”