British firm Arm lays off over 70 engineers in China, relocating roles

By Jane Lanhee Lee and Ian King

Arm Holdings Plc has recently laid off over 70 software engineers in China though it will relocate some of the roles outside of the Asian nation, according to people with knowledge of the move. 
 

The British firm’s actions mirrored those of major chip companies including Qualcomm Inc. that have cut back on the global staffing level earlier this year as the semiconductor industry faces a downturn due to lackluster demand for electronics. In November, Arm gave a disappointing sales forecast amid a slump in smartphone sales. 

About 15 of the staff whose positions are being eliminated will be offered different roles working on China-related projects, according to one of the people, who declined to be identified discussing private matters. 

The jobs being terminated are currently filled by contract software engineers who have worked on projects that span Arm’s business around the world, according to another one of the people. 

“In order to ensure that the China Software Ecosystem can fully maximize the benefits of Arm performance and features, Arm is restructuring its China software engineering resources to focus on direct support for local developers,” the Cambridge, UK-based company said in a statement. 

China’s contribution to Arm’s global sales fell to about 20% from 25% as rest of the world grew much faster, Chief Financial Officer Jason Child told analysts in November. 

The SoftBank Group Corp.-backed firm has been impacted by restrictions Washington has imposed on technology exports to Chinese companies as Arm has developed some of its proprietary designs, widely used by mobile devices, in the US. 

Arm is still recovering from the turmoil of an extended dispute with the ousted head of Arm China, a joint venture owned by SoftBank and a group of Chinese investors. 

Former Arm China Chief Executive Officer Allen Wu had refused to leave his post after being dismissed and it took investors years to retake control. 

Arm China acts as the sales office for the British chip designer in the largest market for semiconductors. Earlier this year, the Chinese entity itself let go over over 100 employees, most of them working in the research and development unit to create new chip technology for the local market, the people said.

Arm has outsourced the work of supporting its Chinese customers to Arm China through a division called global service, which had as many as 200 employees at one point. Over 70 employees at that department have been let go, with some expecting an offer to be relocated, according to one of the people. Arm China did not immediately respond to a request seeking comment.