GlobalFoundries cuts jobs to slash operating costs
Contract chipmaker fails to detail numbers of layoffs or planned timeframe in email to staff
GlobalFoundries is planning job cuts to reduce overhead amid weakening demand for semiconductors.
The contract manufacturer informed workers at the end of last week that there would be layoffs, but did not give details of how many employees a timeframe or sense of scope. GlobalFoundries previously discussed plans to create savings of approximately $200 million in operational expenditure during its Q3 earnings conference call.
The largest US-based contract chipmaker confirmed the job cuts and a hiring freeze to Bloomberg. We have asked GlobalFoundries for specifics on numbers.
New posts on online forums such as TheLayoff.com also seem to show employees not happy about the situation, with one commentator writing: "Nice little email right before the weekend! Paraphrasing 'Hey everyone, you might be getting laid off but we can't tell you who, how many, when or even where. Please feel free to worry and speculate!'"
In its Q3 earnings announcement, GlobalFoundries said it was seeing slower chip demand, and some customers had already asked to adjust their 2023 shipments downward. It also expected to see little or no growth in revenue for the current quarter running to the end of the year.
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The company's CFO Dave Reeder said on the earnings call last week it was seeking to contain costs and accelerate previously planned productivity initiatives, and while it was still working out these initiatives, they were anticipated to deliver annual savings of approximately $200 million, the majority of which would come from cuts to operational expenses.
"We're moving pretty aggressively on the cost containment activities and of the annualized $200 million, I think our expectation would be to try to get at least half of that next year, if not three-quarters," Reeder said.
In addition, GlobalFoundries said it was on track to close the sale of its East Fishkill 300mm wafer production facility at the end of 2022. This is a former IBM fabrication plant acquired in 2014, which the company is now passing to another chipmaker, Onsemi, in a deal valued at $430 million.
This move means workers at the facility in upstate New York, estimated to number at least 1,000 people, will transfer from GlobalFoundries to Onsemi. It is not clear whether these transferred employees are counted among the layoffs.
The news comes weeks after Intel said it would lay off a "meaningful number" of employees and ditch product lines as part of massive spending cuts at the chipmaker. ®