Arm freezes hiring until Nvidia takeover, cancels everyone's 'wellbeing' allowance
Acquisition expected to complete in April 2022, empty positions can't be filled until then
Exclusive Arm has entered an engineering hiring freeze that may last until April 2022 when it expects its acquisition by Nvidia to complete.
Not only are teams around the world not allowed to hire, but also positions cannot be backfilled when employees leave. Any open roles are now on hold. In addition, Arm canceled an annual "wellbeing" allowance, a move those who spoke to The Register said is effectively a pay cut, and a significant one at that for graduates and other lower-paid staffers.
The hiring freeze, which came into force this month, affects Arm's chip design wing – its IP Products Group, or IPG – though The Register understands hiring in other departments, such as sales, marketing, finance, HR, and operations, has slowed to a trickle.
IPG president Rene Haas must personally authorize any backfill requests. The default answer will be no. Contractors cannot be taken on either, and fixed-term contract work is frozen, too.
Staff were told that Softbank-owned Arm was ahead of its hiring plans – it increased its headcount by eight per cent in the past year – and now needed to ensure it is "within the cost targets for the business." In the background to this, Nvidia is trying to acquire UK-headquartered Arm for $40bn, a takeover the British government is scrutinizing to see if there is a clash with its national security interests.
In an FAQ shared with staff regarding the freeze, and seen by The Register, Arm bosses stated:
The primary reason for this is that due to the accelerated hiring in the past six months, we are well ahead of our planned headcount. The market response has been fantastic, the selection process rigorous, and we have hired some exceptional people into Arm from across the globe.
We are pleased to welcome these new hires from early careers through to experienced business leaders. However, we now need to take this action to ensure we are within the cost targets for the business.
"We expect this will last until the Nvidia deal closes, which we currently anticipate will be in April 2022," the document continued. Staff were also told that Arm's future hiring plans will be formed in discussion with Nvidia and that "closer to [the acquisition's] close, we will update you then."
The majority of graduate positions and internships have been filled, and any open roles have been closed. Arm had "already pulled back on a small number of UK graduate roles after a review," the FAQ stated.
Wellbeing allowance scrapped
Arm has also canceled its FlexPot scheme: this was an annual allowance granted to employees and fixed-term contract workers, the size of which was determined by location. In the UK, the allowance would be £4,500 per person, and in the US $8,500. The Register understands this perk was introduced after Arm went private in 2016, when it was acquired by Softbank, and replaced a scheme that distributed shares to employees.
Staff were told FlexPot could be used to fund, per internal documents, "activities that support you and your family’s health or financial wellbeing," and "any activities that allow you to learn something new." In reality, this could be used to expense anything management would approve – investments in share funds, summer camps for children, home insurance and rental deposits, personal trainers, scuba diving, school tuition fees, dance lessons, art classes... the list is quite long and fairly open ended.
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Although FlexPot was not guaranteed every year, staff came to rely on it, and it was due to continue running in 2021 until it was canceled this month. No reason was given, a source told us. For graduates and lower-paid staff, the allowance amounted to 10 per cent or more of their take-home compensation, even taking into account a bonus people were paid this past quarter as Arm has been performing well financially, they added.
Staff were told in a quarterly business update that the company had exceeded its goals. However, FlexPot will be no more. It may return in one form or another depending on how the Nvidia acquisition goes, The Reg understands.
"This is happening at a time when nobody knows what will happen to staff after the Nvidia deal goes through, assuming it does," one person close to the matter told us.
Phil Hughes, Arm's vice president for external communications, told The Register:
This year is about executing on our strategy and preparing for a new chapter which will bring significant additional rewards for our people. Arm, like all companies, adjusts its benefits periodically as necessary, but we always ensure our people understand why we are making changes as keeping them well-informed, motivated and rewarded is vital as they are the core of our success.
We note that Arm recorded $1.98bn in revenue in the 12 months to March 31, up 9.5 per cent year-on-year, and a loss of $312m that Softbank said in a financial report [PDF] was mainly due to charges linked to Nvidia's proposed acquisition and share-based remuneration for Arm staff. Softbank also said Arm's bottom line was affected by the extra hands it had taken on.
Separately, El Reg has heard that Arm, which employs about 6,200 people globally, increased the healthcare benefits of its staff and their families in India, and granted workers with families in the COVID-19-ravaged nation extended leave to be with their relatives during the pandemic.
On Friday, Nvidia announced a four-for-one stock split, and closed Monday with its share price up four per cent to $624.48 apiece. ®