GlobalFoundries this week quantified the number of employees it plays to lay off in the coming weeks to cut its operating expenses due to softening chip demand. The company will cut less than 800 employees globally by the end of December. The job cuts will mainly involve non-manufacturing roles.
Thomas Caulfield, chief executive of GlobalFoundries, told employees at a virtual meeting that workers in the U.S. and Singapore will be notified next week. Meanwhile, workers in Germany will be notified about their layoffs later. He did not quantify how many people will be let go in the U.S., Germany, and Singapore. Still, he emphasized that the company would focus primarily on cutting non-manufacturing roles, though some fab workers would also be laid off.
GlobalFoundries employs around 14,000 worldwide, so 800 people represent around 5.7% of the company's global staff, notes VTDigger.
"As part of a recent all-employee meeting, we shared the cost saving actions we are taking across our business in response to the current macroeconomic environment including reducing corporate and manufacturing overhead costs as well as selectively reducing our workforce by less than 800 employees globally before the end of the year," Julie Moynehan, a spokesperson for the company, wrote in an email to VTDigger.
It is unclear whether 800 positions globally is the total number of job cuts or the number of layoffs for the calendar year 2022.
Meanwhile, the layoffs are said to allow GlobalFoundries to save some $200 million per year, which may not sound much in the grand scheme of things. However, the world's No. 4 contract maker of chips wants to stay profitable now that it is a public company after years of bleeding money when it was a private company controlled by Mubadala, a sovereign state-owned investment fund of Abu Dhabi.
GlobalFoundries serves over 200 customers and has five manufacturing sites on different continents. Amid the 2020 ~ 2021 chip demand boom, GlobalFoundries announced significant plans to expand the production capacities of its fabs in Germany, Singapore, and the U.S. In addition, GlobalFoundries revealed it would build an all-new fab in Malta, New York, in a private-public partnership to support growing demand, but never revealed any additional details.
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Anton Shilov is a Freelance News Writer at Tom’s Hardware US. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
they'll die a profitable death, the only thing that is left to do after the decision to stop developing new process nodes.Reply
Mubala stopped half-way, in order to make their plan succeed a lot more money would have to be spent on new fabs and process development - instead they bought all those half-defunct fabs which no longer could compete with samsung and tsmc.
There are chips in everything nowadays. You don't need to be on the leading edge to be profitable. The 12/14nm and 28/32 whatever they want to call it, will be in production for another 20+ years with more and more demand as products on bigger nodes transition and newer products and newer gadgets come to market. In fact the not bleeding edge products make up the bulk of the market and have expanded many times faster than the bleeding edge. You just don't hear about 1,000+ chips in each modern car or multiple chips in remote controls, smoke detectors, batteries, surge protectors, fly swatters, etc.. whatever you can think of. Everything has chips nowadays and the majority are not leading edge.Reply
Commodity chips are and will be a good business. What they won't be is one with 50%-60% margins. That's why the accounting and cost cutting has to be done quicker and tighter to market conditions.Reply
Someone tell car manufacturers to switch to Global Foundries. They clearly need the business.Reply
I feel this may be the beginning of pains ahead for foundry businesses. It is true that demand for electronic chips have increased drastically over the years, but a lot of shortages seems to be attributed to lack of some sort of raw materials due to supply chain disruptions. Yet, every foundry have double or triple down the fab expansion without fully addressing the shortages of the materials required. With recession, inflation and high cost of borrowing hitting every country hard, it will not be surprising that demand for chips will continue to fall for the foreseeable future.Reply