Arm is getting cut off after an enormous acquisition deal with Nvidia fell through.
The London-based chipmaker, owned by Softbank, will cut up to 15% of its workforce, the company said Tuesday, just one month after its $US40 ($56) billion sale to U.S. graphics card maker Nvidia was abandoned due to regulatory pressure.
The company said most of the 1,000 lost jobs would be in the UK and U.S. According to Bloomberg, the majority of layoffs to Arm’s 6,500-strong worldwide workforce won’t affect engineers. Arm says the cuts are being made due to redundancies in order to reduce spending and work on fewer projects.
“Like any business, Arm is continually reviewing its business plan to ensure the company has the right balance between opportunities and cost discipline. Unfortunately, this process includes proposed redundancies across Arm’s global workforce.”
Softbank had agreed to sell Arm to Nvidia in a blockbuster deal worth $US40 ($56) billion, based on the value of the graphics card maker’s value stock at the time. Had the acquisition gone through, it would have been the largest in semiconductor history. Arm is one of the most important chip designers in the world and provides the architecture for mobile processors found in devices sold by Apple, Samsung, Google, and many others.
As the manufacturer of a vital commodity in the tech industry, Arm has promoted a public commitment to commercial neutrality, promising to treat each of its customers equally, but Nvidia’s intended acquisition put this policy in doubt and reportedly spooked several consumer tech giants. Worried that Nvidia might prevent Arm from allowing others to licence its chip designs, competitors actively work with regulators to crush the deal. In the end, the acquisition collapsed following mounting pressure from antitrust bodies in the U.S., UK, and EU, and a lawsuit issued by the U.S. Federal Trade Commission to halt the transaction.
Nvidia will reportedly pay Softbank a $US1.25 ($2) billion fee for failing to close the transaction, as per the terms of the deal. Softbank is reportedly preparing a public listing of Arm by this time next year. Once one of the most dominant tech investors in the world, Softbank has suffered through rocky years and falling returns since the onset of the coronavirus pandemic.