GlobalFoundries To See Job Cuts as $200 Million Per Year Savings Bite

GlobalFoundries
(Image credit: GlobalFoundries)

GlobalFoundries, the AMD spin-off that went public in 2021 and produces enough chips to make it the world’s fourth-largest semiconductor manufacturer, has announced it will enact a hiring freeze and begin job cuts. The news, which came in an earnings call last week reported by Bloomberg (opens in new tab), is part of a drive to lower the company’s operating expenses by $200 million annually.

(Image credit: GlobalFoundries)

In an earnings announcement earlier this month, the firm, valued at $25 billion after its October 2021 floatation, reported better-than-expected results (opens in new tab), hitting a new record for revenue with a $2.1 billion figure, up 22% year on year. However, it also said it saw a slowing in chip demand for 2023 and expected little or no growth in the current quarter. According to its CFO Dave Reeder, the company was looking to contain costs and bring up planned ‘initiatives’ that would deliver the $200 million annual savings, but the bulk of it would come from cuts to expenses.

GlobalFoundries, which makes chips for Qualcomm and MediaTek, among others, confirmed the layoffs and hiring freeze to Bloomberg but didn’t go into any more detail, such as how many jobs would be affected or which parts of the business the ax would fall on.

"Some of our customers have requested to modestly adjust some of their 2023 shipments downward, particularly with respect to the first half of 2023," CEO Dr. Thomas Caulfield said as he opened the earnings call. Then, in a quote released to the media, continued: “In the third quarter, the GF team continued to execute on its commitments to customers and shareholders despite ongoing macroeconomic and geopolitical challenges.”

He added: “300mm-equivalent wafer shipments of 637,000 was a record for GF, an increase of 5% year-over-year. Our revenue grew 22% year-over-year, and we delivered record gross, operating, and net profits, making significant progress toward our long-term financial model. We remain on track to deliver a strong year of growth and profitability.”

GlobalFoundries also announced it would sell its plant in New York state to Onsemi in a deal worth $430 million. The plant, which IBM used before GlobalFoundries moved in, employs 1,000 people who will now transfer to the new owner, though it’s unclear whether these will be counted among the layoffs. The firm has also received $30 million in federal funding to advance the ‘innovation and production’ of next-generation gallium nitride-on-silicon chips at its plant in Vermont.

Ian Evenden
Freelance News Writer

Ian Evenden is a UK-based news writer for Tom’s Hardware US. He’ll write about anything, but stories about Raspberry Pi and DIY robots seem to find their way to him.

  • ingwe13
    So on the back of record revenue and income, they are making cuts? Feels like some short term thinking...
    Reply
  • Mandark
    Yeah, just when we need them now this doesn’t make any sense. Very fishy indeed.
    Reply
  • umeng2002_2
    So much for a chip shortage.
    Reply
  • TerryLaze
    ingwe13 said:
    So on the back of record revenue and income, they are making cuts? Feels like some short term thinking...
    They made 336mil and the shareholders got 337 of that...
    And they also are still 14b + in the red.
    Revenue and income aren't the only things here.
    Net income $336 $5 Attributable to: Shareholders of GlobalFoundries $337 $6 Non-controlling interest $(1)
    Accumulated deficit (14,689)
    Reply
  • jp7189
    ingwe13 said:
    So on the back of record revenue and income, they are making cuts? Feels like some short term thinking...
    I was thinking the opposite. Storm's a coming. Prepare now while in fair weather instead of patching holes while the ship is going down.
    Reply