Reports emerged last week that UK chip maker Arm was planning to cut up to 15% of its workforce, and now the Unite union has called on the company to freeze the job cuts.
According to the FT, up to 1,000 jobs are set to go, most of them in the UK and the US. In February, Nvidia pulled out of its bid to buy Arm from SoftBank Group (SBG) for $31bn, blaming what it described as “significant regulatory challenges”.
After the deal fell through, Rene Haas replaced Simon Segar as Arm CEO. The company is also looking for an initial public offering (IPO).
In the transcript of its third-quarter 2022 earnings call, posted on Seeking Alpha, Masayoshi Son, CEO and chairman of SoftBank, discussed the benefits of the IPO for employees. He said: “We want to provide a good incentive for employees of Arm... who are doing the hard work for the Arm business. That’s why the IPO is a good objective for that.”
During the earnings call, SoftBank CFO Inder Singh discussed Arm’s strong financial position, saying: “As we look at our business, we see a very highly profitable and cash-generative business. And if I think about the balance sheet that we have, it is actually a very strong balance sheet, debt-free.
“Every year, our gross margins, which are north of 95%, create the cash-generating power that we need to apply against the investments we have to make to grow the company. So we are very confident about our ability to invest in our business, to grow the business and to actually win in these new markets that we’re entering. And we will continue to innovate for our customers, which is what Arm has always done and we will do on an accelerating basis going forward.”
Singh said that with Arm’s new CEO, the company would execute “a very bold strategy”, and as this is rolled out successfully, “we will begin to set up a very, very impressive IPO story for our investors in the future”.
Unite said it is calling on Arm to give Unite’s accountants full access to the company’s accounts in the light of its decision to make significant job cuts in this strategically important technology company, which supports highly skilled UK jobs.
Unite regional officer Matthew Whaley said: “We call on Arm to open up the books and freeze job cuts now to allow Unite’s accountants to examine the company’s true financial situation. These are highly skilled technology workers. They can’t afford to lose their jobs and the UK economy can’t afford to lose these skills.
“It appears that bosses want to reduce costs by targeting workers’ jobs while piling extra work on those left behind. The company has already told workers to take an effective pay cut worth thousands. Unite is calling for a comprehensive and transparent consultation and a freeze on job cuts.”