ARM Lays Off Workers In China – Report

ARM Holdings has reportedly axed a number of engineers from its Chinese venture, and will relocate some of the roles outside of the Asian nation.

Bloomberg, citing ‘people with knowledge of the move’, reported that ARM’s Chinese operation (called ARM China) has recently laid off over 70 software engineers in China.

The layoffs come after some notable developments for the Cambridge-based chip designer in the second half of 2023. In September Apple signed a deal to keep using ARM’s chip designs over the next two decades “beyond 2040.”

Chip designer

And then in September ARM held a successful IPO on Nasdaq, that made ARM the most valuable company to list in New York since Rivian Automotive listed back in November 2021.

The IPO raised $4.87 billion for ARM’s owner Softbank, which had offloaded less than 10 percent of its stake as part of the offering.

ARM had been valued at $54.5bn at listing time, but is now currently worth $73.8bn, as of Wednesday.

Despite these positive developments, ARM is contending with a downturn in the chip market that has seen other chip makers reduce headcount. In November, ARM disappointed with its sales forecast amid a slump in smartphone sales.

It should be remembered that in October 2022 it was reported that ARM in the past year had axed 18 percent of its global workforce, with the UK workforce taking a larger hit proportionally.

ARM is also contending with geopolitical and trade issues between China and the United States and the West.

In October the Biden Administration tightened the export controls on advanced AI semiconductors to China.

That came one year after the US had announced in October 2022 its sweeping export controls for semiconductor manufacturing equipment and chips to China, in an effort counter Beijing’s use of the chips for military applications.

China layoffs

ARM has an independent entity in China that has the exclusive rights to distribute ARM’s technology in the country.

It is called ARM China, and is a joint venture between Japan’s SoftBank and a number of Chinese investors.

At one stage ARM China contributed roughly a quarter of ARM’s annual turnover, but reportedly has a history of making late payments, coupled with management turmoil.

Now Bloomberg has reported that ARM China recently laid off over 70 software engineers in China though it will relocate some of the roles (thought to be 15 positions) outside of the Asian nation.

It is understood that laid off staffers had been supporting clients with ARM global IP (intellectual property).

“In order to ensure that the China Software Ecosystem can fully maximise the benefits of ARM performance and features, ARM is restructuring its China software engineering resources to focus on direct support for local developers,” the chip designer said in a statement to Bloomberg.