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LONDON – British chip designer Arm plans to cut up to 1,000 jobs, or 15% of its workforce, just weeks after its $40 billion deal with Nvidia fell through.
Widely regarded as the crown jewel of the UK tech sector, Arm has around 6,400 employees worldwide, and about half of them are based in the UK.
“Like any other business, Arm is constantly reviewing its business plan to ensure the company has the right balance between capability and cost discipline,” an Arm spokesperson told CNBC Tuesday.
“Unfortunately, this process includes proposed layoffs of Arm employees around the world.”
They added: “If the proposals are accepted, we expect about 12-15% of the people in Arm to be affected globally.”
Although Arm is headquartered in Cambridge, England, the company is owned by Japanese tech giant SoftBank, which paid around $32 billion for the firm in 2016.
In September 2020, SoftBank announced that it planned to sell Arm to US chip giant Nvidia for $40 billion, but the deal was canceled in February after a period of scrutiny by competition regulators in the US, EU, China and the UK.
Opponents had several grievances, but the deal’s main problem was access to Arm’s innovative chips.
Arm licenses its “architecture” to hundreds of companies around the world. Apple uses them in iPhones and iPads, Amazon uses them in Kindles, and car manufacturers use them in vehicles. Analysts say if Nvidia stopped other companies using Arm chips in their semiconductors, the consequences could be huge.
Critics of the deal also suggested that Nvidia could cut jobs at Arm once it takes over the company. However, Nvidia has repeatedly stressed that it wants to invest in Arm.
Former Arm CEO Simon Segars told The Telegraph last July that the company may have to cut jobs if the Nvidia deal is blocked.
SoftBank now plans to list Arm without discussing a deal with Nvidia. Masayoshi Son, CEO of SoftBank, said in February that the company is likely to be listed on the New York Nasdaq Stock Exchange.
However, pressure is mounting on SoftBank to issue a dual listing.
Julian Rowe, general partner at tech investment firm Latitude, told CNBC the UK government should be doing everything it can to ensure local successful tech companies like Arm don’t sell too early and cheap to international buyers or don’t settle for valuable listings abroad.
“History will tell you that the Nasdaq or the NYSE might be a more natural home for a chip designer like Arm, but this underestimates the extent to which Arm is arguably the least well-known success story in British tech and the special position it can occupy. thanks to the London market. list,” Rowe said.
“He has the potential to become a flag bearer in the British high-tech scene.”