ARM Could Fire 1,000 Employees After $40 Billion Deal With NVIDIA Collapsed

Urian B., Tech Times 15 March 2022, 09:03 am

ARM could let go of 1,000 employees or about 15% of the company's workforce after a massive $40 billion deal with NVIDIA collapsed. With that, ARM employees amount to a whopping 6,400 people around the world, with about half of them located in the UK.

ARM Could Cut 12-15% of Company's Global Workforce

Based on the CNBC report, an ARM spokesperson released a statement to them saying that, like other businesses, they are still trying to review their business plan to ensure that the company remains balanced between both opportunities cost discipline.

Unfortunately, however, the process also includes eliminating "redundancies" across the company's workforce around the world. ARM is anticipating 12-15% of the company's global workforce would be affected due to the redundancies across its global workforce, as per the spokesperson.

ARM Was Purchased by SoftBank for Around $32 Billion in 2016

Although the company is headquartered in Cambridge, England, it was owned by SoftBank, a Japanese tech giant, which bought the firm in 2016 for around $32 billion. In September 2020, SoftBank stated that it had planned to sell ARM to NVIDIA for a whopping $40 billion.

The deal, however, was later scrapped in February of this year after it received intense scrutiny from competition regulators located in the United Kingdom, United States, EU countries, and China. Although there were a lot of issues with the competition, the main problem was mostly regarding the access NVIDIA would get to ARM's "innovative chip designs."

ARM Licenses Out Its Chip Architecture to Hundreds of Companies

ARM currently licenses out its "architecture" to hundreds of different companies located all around the world, from Apple iPhones to car manufacturers. Even Amazon uses ARM's architecture for certain products like its Kindles.

Should NVIDIA decide to stop ARM from allowing its chip designs to be used by other companies, if the deal went through, analysts say that the "implications could have been huge." Those criticizing the deal suggested that NVIDIA could also cut ARM jobs should it have bought out the company.

What Will Happen to ARM Now That NVIDIA Won't Buy It

NVIDIA, however, stressed multiple times that they just wanted to invest in ARM. The former CEO of ARM, Simon Segars, gave a statement to The Telegraph in July of 2021 saying that the company could also cut jobs should the deal with NVIDIA not push through.

SoftBank is currently planning to take ARM public, especially since the NVIDIA deal will no longer push through. SoftBank's CEO, Masayoshi Son, stated that the company might appear on New York's NASDAQ stock exchange.

The company, however, is receiving a lot of pressure, pushing them to dual-list the company. As a general partner at Latitude, a tech investment firm gave a statement to CNBC saying the real question is whether the company would be sold too early and too cheaply or if the company would choose to take their valued listings elsewhere.

This article is owned by Tech Times

Written by Urian B.