/Arm-Sale-Collapse.webp "Nvidia said despite the failed takeover it would remain a close partner because of Arm’s strategic importance in the global chip industry. Photograph: ARM Holdings/PA")
Arm is to reduce up to 15% of its employees, the UK computer chipmaker announced just over a month after its $40 billion (£30 billion) sale to US competitor Nvidia fell through.
The Cambridge-based corporation stated that most employment losses, totaling approximately 1,000 positions, would occur in the United Kingdom and the United States. Arm employs over 6,500 people globally, including 3,000 in the United Kingdom.
"Like any business, Arm is constantly reviewing its business plan to ensure it maintains the proper balance of opportunities and cost discipline," Arm stated. Regrettably, this approach will result in projected layoffs across Arm's global workforce."
SoftBank delayed its blockbuster Arm sale to Nvidia in February, citing regulatory difficulties, and said it would instead attempt to IPO the firm. SoftBank acquired Arm in 2016.
The planned sale's worth, contingent on Nvidia's stock price, was first estimated at around $40 billion but increased to almost $80 billion late last year as Nvidia's stock price increased.
The transaction, which would have been the industry's largest, has become bogged down in red tape on both sides of the Atlantic and in China. Since it was revealed in September 2020, it has also met fierce resistance from industry players.
SoftBank stated at the time that it would pursue an initial public offering to cash in on Arm and would get a $1.25 billion breakup fee from Nvidia.
Despite the unsuccessful takeover attempt, Nvidia stated that it would remain a close partner due to Arm's strategic relevance in the global semiconductor business.
Mike Clancy, general secretary of the Prospect, stated: "Arm is a significant source of high-quality technology jobs in the UK. This latest development will shock thousands of Arm employees who are fearful for their careers.
"We were always aware that if the sale to Nvidia fell through, the company might seek to restructure or reduce costs. We desperately require government intervention immediately to safeguard British employment and research and development funding."
