ARM Cuts 40 Percent Of UK Staff Recruited Under Softbank – Report

The United Kingdom has borne the brunt of job cuts at chip designer ARM Holdings, it is being reported.

Back in March, an internal email to ARM staff from newly installed CEO Rene Haas outlined that job losses of between 12 to 15 percent were expected at the firm.

The move came after former CEO Simon Segars resigned in February, following the collapse of the $40bn sale of ARM Holdings to Nvidia, which Segars had strongly favoured instead an IPO.

That sale was called off due to “significant regulatory challenges”, as well as intense market opposition.

Job losses

ARM, it should be remembered, has been owned by Japanese firm SoftBank for five years, after it had acquired the British chip designer for $32bn in 2016.

When SoftBank bought the company it made a commitment to double it’s 1,770 British staff over the following five years.

By September 2021, ARM UK’s staff had peaked at more than 3,500, out of a global total of 6,950.

The Japanese conglomerate had thus kept promise to double British workforce, but now the Financial Times has reported that ARM’s UK operation has since shed 40 percent of the workforce it had recruited under SoftBank.

It reported that in the past year, ARM has cut 18 percent of its global workforce, with the UK taking a larger hit proportionally.

The reduction was driven in part by management refocusing the business, and has been exacerbated by an exodus of staff unsettled by uncertainty about the company’s future, according to former staff members who spoke to the Financial Times.

According to the Financial Times, ARM has been left with 2,800 employees in the UK, meaning that since September of last year, it has lost 700 staff.

Its workforce in the rest of the world has shrunk by 550.

IPO plan

After the Nvidia acquisition fell apart, Masayoshi Son, SoftBank’s founder and chief executive, said he would instead take the company public in New York, seeking a valuation of more than $50bn.

The UK government of course wants its biggest and best tech companies to list on home soil, but there is little doubt that a US listing is more attractive, as firms tend to achieve higher valuations on the NASDAQ or the New York Stock Exchange compared to other exchanges.

However ARM was actually dual-listed in London and New York until 2016, when SoftBank acquired it – an acquisition the UK government at the time welcomed, despite concernat the time of ARM falling into the hands of a foreign entity.

ARM was formed in 1990 when it was spun out of Acorn Computers and its chip designs are used in 95 percent of smartphones in use today because of their low power consumption.

Rather than manufacture chips, it licenses designs to other companies like Qualcomm and MediaTek.