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Arm job cuts hit UK harder than global rationalization
Anyone remember SoftBank's pledge to double headcount in Britain?
Arm has reportedly chopped around 20 percent of its headcount in the UK, unpicking some of the recruitment commitments parent SoftBank made to the government when it bought the chip designer.
SoftBank agreed to double Arm's 1,770-strong UK workforce when it purchased the company in 2016 and over the subsequent half a decade hired 1,730 people, taking the local tally to 3,500.
However, as pointed out by the Financial Times, Arm has laid off 18 per cent of its global employee base of 6,950 with a disproportionate amount in Britain. Arm has cut 20 percent of its local workforce, or 700 roles, equating to a little over 40 percent of the hires made when attempting to double the size of the Brit operation.
In the rest of the world, Arm has reduced staff numbers by 550.
The process began in March when the chip designer said it needed to shed between 12 and 15 percent of employees in the wake of Nvidia's protracted and ultimately doomed $66 billion bid to buy the company.
Newly installed CEO Rene Haas said at the time that to remain competitive it needed to expunge duplication of work "now that we are one Arm," halt further work on projects no longer critical to its future, and be more disciplined in managing overheads.
Staff told the financial newspaper that the redundancy process was compounded by an "exodus" of staff at Arm who were upset by the prolonged uncertainty surrounding the business.
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Unite the union called on Arm's management to rethink the job cutting, claiming the business was targeting skilled workers' jobs while piling extra work on those left behind.
An investor told the FT: "Arm is about people and this is a business where you want as an investor to see some stability on staffing."
The Register has asked Arm to comment.
The chip designer said it was "seeing attrition rates in line with current industry norms" and had 525 roles, principally in engineering, being advertised, of which 373 were in the UK.
"Across the technology sector businesses are being impacted by the after-effects of the global pandemic and 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 enables our partner ecosystem to build the future on Arm."
The company told us its headcount is appropriate for the "needs of the business following a restructure earlier this year, and the separation of the ISG business from Arm in 2021.
"We continue to hire and invest heavily in our engineering 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 IPO. The company is understood to favor New York's stock exchange but the UK government is holding out hope it can convince SoftBank management to opt for a dual listing in London. The process was expected to kick off before the year end but turmoil in the global stock markets may force a delay.
Arm continues to be a shining light within SoftBank's business, growing revenue 6 percent year-on-year to $719 million in its Q1 of fiscal 2023 ended 30 June. This included $453 million in chip royalties, up 22 percent. Earnings before income tax, depreciation and amortization were $414 million, up 31 percent.
SoftBank reported a loss for the three-month period of $23.4 billion, caused by huge write downs in the valuations of investments it had made. ®