ARM Will Cut 1,000 Jobs After Failed Acquisition by Nvidia
The reduction is part of an attempt by ARM to “stay competitive” and “remove duplication of work,” according to an email sent to staff by CEO Rene Haas and reviewed by The Daily Telegraph. “To be successful in the opportunities we have ahead of us, we need to be more disciplined about our costs and where we’re investing,” Haas wrote. “It’s essential that we focus on activities that will move our strategy forward at pace.”
Just as important as the reduction itself is the context surrounding it: as we touched on last month, ARM was once slated to be acquired by GPU and SoC giant Nvidia for $66 billion before the deal failed for more reasons than one. Regulators in the US, UK, EU, Japan, and South Korea flagged that it could be problematic to allow one of ARM’s customers to absorb the company, while competitors expressed concern regarding Nvidia’s eventual size if the bid went through. The deal collapsed in early February, with Nvidia CEO Jensen Huang saying the company “could not give regulators the comfort they needed to approve” the acquisition.
ARM’s enduring parent company Softbank has reportedly been preparing to bring ARM to IPO ever since. Former ARM CEO Simon Segars left his position shortly after the failed acquisition to allow Haas, the company’s former head of intellectual property, to step up to the plate. Almost immediately, ARM announced its intent to go public by March 2023. By then, its 1,000 redundant roles may be long forgotten—a difficult truth ARM surely has considered by now.
Some believe ARM’s reduction in force represents an effort to slim the company down and pump up profit projections before it shoots for a US IPO. ARM doesn’t seem to like that perception, though, given how selfish it looks. Instead, its spokespeople seem to be constructing an air of normalcy. “Like any business, Arm is continually reviewing its business plan to ensure the company has the right balance between opportunities and cost discipline,” one ARM spokesperson told The Daily Telegraph. “Unfortunately, this process includes proposed redundancies across Arm’s global workforce.”
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