Samsung Will Shut Down its CPU Project in Austin, Texas

Samsung will have nearly 300 fewer employees in the U.S. next year. The Austin American-Statesman reported Friday that documents filed with the Texas Workforce Commission revealed that the company plans to permanently lay off 290 workers from its research and development facilities in Texas and California on December 31.

The layoffs were revealed in a Worker Adjustment and Restraining Notification Act (WARN) letter that companies are required to file when they plan to let go of a large number of workers. Samsung didn't say how many of the 290 workers affected by these layoffs will come from the Samsung Austin Research Center and how many will come from the Advanced Computer Lab in San Jose, California, the American-Statesman reported.

These layoffs reportedly resulted from Samsung's decision to shut down its Central Processing Unit project. Rather than continuing to design its own chips based on Arm processors, the American-Statesman reported, Samsung might just license Arm's processors directly. (The prevailing theory seems to be that Samsung's chips required too much power; switching to Arm's design could address that issue.)

Samsung giving up on its own smartphone processor designs puts it at odds with much of the industry. Apple's relied on its own chip designs for years, with its latest design being the A13 Bionic found in the iPhone 11 lineup, and Microsoft recently introduced a custom SQ1 processor based on Qualcomm's Snapdragon 8cx platform. Now the world's largest smartphone manufacturer is ducking out.

While the specifics come as a bit of a surprise, the tightening of Samsung's proverbial belt doesn't, considering its financial results over the last three quarters. The company reported year-over-year drops in operating profits between 50% and 60% for all three fiscal quarters of 2019. That can mostly be attributed to the memory market's struggles, but demand for Samsung's phones is down, too.

Samsung Austin spokesperson Michele Glaze told the American-Statesman that the company will keep its R&D facility in the city open despite shuttering the CPU project. The company said it's invested $17 billion in Austin over the years; that money won't go to waste now. Because the layoffs are split between Austin and San Jose, it's not even clear exactly how the Samsung Austin Research Center will be affected. 

Glaze also offered the American-Statesman this statement: “We have treated all employees with respect. They all have been given appropriate packages and advanced notice, These things are very tough. People always wonder, ‘Did they treat them right?’ And we did. It’s unfortunate that they are losing their jobs, but it is based upon the fact that we’re always assessing our business.” 

Apparently the belt can't tighten itself.