Arm freezes hiring until Nvidia takeover, cancels everyone's 'wellbeing' allowance Arm has entered an engineering hiring freeze that may last until April 2022 when it expects its acquisition by Nvidia to complete. Not only are teams around the world not allowed to hire, but also positions cannot be backfilled when employees leave. Any open roles are now on hold. In addition, Arm canceled an annual "wellbeing …
and manage to hold it back a good year without even buying it up - assuming the UK government does actually agree which probably depends on some offshore donations rather than <FLAG WAVING>national interest</FLAG WAVING>.
... assuming the UK government does actually agree ...
... assuming the UK government does actually have a clue about anything technology related and give a monkey's toss about it.
All I can see is one bunder after another, typical Tory behaviour.
Along with Brexit, allowing the Softbank deal to go through is one of the largest fuck-ups in UK history.
Uncanny ...
Expect ARM to dilute in the fog and it's technology effectively neutered.
A.
I'm not going to add to the "politicising" of this by giving examples of other parties monumental screwups.
But you are getting my down vote as well.
Besides, they have also had other things to deal with - perhaps you've not heard of COVID? - like any government.
Besides, they have also had other things to deal with - perhaps you've not heard of COVID? - like any government.
Come on - even THIS government can't blame the decision to allow the Softbank deal to go through on COVID - or Brexit, come to that.
This is an exceptionally blinkered move by management driven by bean counting.
A company at the top of it's game and a desirable acquisition destroys the morale of the people who put it there without explaining anything to them.
Then is prepared to hold itself in stasis for a yearand wont even fill vacant positions that are possibly crucial.
Still, what do I know? I haven't got an MBA.
"Ah, someone else under the misconception that shareholders in any company must all be billionaires."
Anyone can hold shares in a company (well, most companies anyway).
The shareholders that "count" *are* billionaires. The rest of you have so few shares that they can effectively ignore you 99% of the time.
This is probably a good idea... because NVidia doesn't give one f@#$ about your wellbeing, whether you're a customer or an employee. All Jen cares about is profits at any cost, no matter how many defective solder joints it takes. Get used to being a just a crunchy cog in the wheel of profits, you pathetic worms.
"All Jen cares about is profits at any cost, no matter how many defective solder joints it takes. Get used to being a just a crunchy cog in the wheel of profits, you pathetic worms"
...and that is just one good reason why the current buyout proposal by Nvidia should be vetoed by the British government.
Before the Softbank takeover, ARM's actual salaries (in the UK, anyway) were regarded internally as being below the market rate, but made up for with shares.
The share distribution stopped when Softbank bought ARM (because giving UK employees shares in a Japanese company was more complicated than they wanted to deal with), and employees anticipated (or naively hoped) that salaries would be adjusted to make the total compensation about the same. Of course, salaries stayed the same, and the flexpot scheme was introduced instead, so people went from salary+shares to salary+discount on yoga classes. Around that time, I left (and indeed found that the market rate salaries were somewhat higher).
"Market Rate" and higher salaries can both be dangerous things in the wrong situations.
For instance - "Market Rate" is the usually trotted out excuse for why some nobody who is useless can demand a telephone number salary in a position such as "CEO" of some regional ambulance service despite being a total walking cluster f**k.
It is also a major reason why salaries in the "upper echelons" of many organisations have spiraled out of control. "Keeping pace with market rates" - he/she gets more as a CEO (because they are doing a genuinely superb job) so I want the same as a CEO (despite being pi** poor at it and ruining everything they touch).
As my experience in banking IT illustrated, high salaries can become a trap. They pay high salaries because, frankly, they are bloody awful places to work. You get used to the money and end up trapped working in "bloody awful places to work" where the only thing keeping most people there is the money - because their expenditure has risen to need that level of salary.
Not suitable for everyone's situation, but I'd rather have a bit of a less well paid job if I it is a job I thoroughly enjoy, than a rather better paid one which I loath and only do for the money. The latter is the sort of thing that leads to breakdowns and other significant mental health issues.
"Arm, like all companies, adjusts its benefits periodically as necessary, but we always ensure our people understand why we are making changes as keeping them well-informed, motivated and rewarded is vital as they are the core of our success."
Except you didn't tell them why you were cutting the welfare allowance...
1 - Why is there no UK interest in ARM?
2 - How hard are the board hoping no execs need to exit the business?
3 - Flexpot (and schemes like it) requires the OK of management to use. Yet it is part of their compensation. Any employment lawyers here?
4 - I would be hugely amused if, after the sale, and most employees realize they've been shafted, again, the majority of the workforce resigns.
There is no UK interest in ARM because Softbank paid a stupid price for it, which they want to recoup.
The stupid price Softbank paid is for reference ~twenty years worth of ARM's yearly revenue and ~64 times their yearly profits. Softbank had presumably hoped to quadruple the licensing to make up for this, however when tried people started looking at switching to other things, and Softbank realised that they'd fucked up and started looking at selling ARM.
Therefore at the asking price it doesn't make financial reason for anybody to buy at the asking price which is roughly half the UK yearly defence budget, and which would be recouped circa 2085.
In fact, I suspect that the only people it would make sense to buy ARM for is Intel to maintain their chippery monopoly (which would surely be blocked by any sane competition authority) or AMD or Nvidia to expand their IP and to muscle their way into more markets.
Nice post!
I just find it hard to fathom how selling off British innovation & technology to non UK companies secures a strategic advantage for the UK. I can see the 40 billion price tag is too rich for us but I can't help think that this is more shortsightedness than securing a technologically beneficial resource.
It does rather piss me off that we went from being a preeminent computing superpower to where we are now.
Thanks. :)
Softbank is Japanese owned, so the appropriate time to intervene would have been at the point of sale from British owners. I'm not really sure what difference it makes to UK plc if it's owned by a Japanese investment bank or Nvidia to be honest.
Selling off British innovation & technology to non UK companies doesn't generate a strategic advantage for the UK. It does get a few billion in tax from the arrangement though which pays for panem et circenses.
To be honest though, in many areas we are in much the same position as France and similar during the 19th century. Our internal markets are of insufficient size to support many industries which are now being operated on a continental or worldwide scale. We are being outcompeted by foreign companies that either offer better products or have lower wage costs (or both) and there's precious little we can do about it to remain competitive without introducing barriers to trade.
The British preoccupation with "free trade" pretty much prevents this, despite it being is a relic of the 19th century where we were the first people to industrialise and "free trade" meant removing barriers for us to sell to people which let us run the factories of the industrial revolution for another couple of hours a day to meet yet another market after the factory had already been built and paid for.
In our existing context about the last thing we want is "free trade" since it means other people laying waste to our industrial base.
You've confused mercantilism with free trade.
Are you sure that you haven't? The publication of Adam Smiths The Wealth of Nations in the 18th century is held as being the death of mercantilism, whereas the industrial revolution and the doctrine of free trade really got going in the 19th century.
It wasn't British owned before softbank - it was a public company. Its shares were owned by anybody who wanted to buy them
If we wanted it to remain British owned the time to do that was in 1990 when it was formed with money from 2 American companies.
Or perhaps the BBC Micro and subsequently ARM should have been an internal BBC program, then under the BBC management and with BBC investment it would be a world beating British colossus
"then under the BBC management and with BBC investment it would be a world beating British colossus"
I'm sorry, have you looked at the BBC recently? They are still funded by the TV licence but seem to produce programmes few people want to watch, then have the gall to charge us a lot more money to watch programmes we have ALREADY paid for on their overpriced subscription service Sh ^H^H Britbox.
Even before the current brouhaha over Martin Bashir's dodgy behaviour blew up in their faces, they have been heading in directions no publicly-funded and supposedly accountable service should be going.
Or did I miss a Sarcasm marker somewhere?
Britain championed Free Trade in the 18th century, But in the 19th century this policy did not apply to the third of the world that was coloured pink on the map.
The British empire countries could only sell their raw materials to Britain and could only buy manufactured goods from Britain.
This worked well for the most part but did lead to a number absurd and unjust situations. E.G. India a country surrounded by sea and bathed in hot sunshine was not allowed to produce its own salt but was forced to buy mineral salt produced in Cheshire using the expensive and polluting process of evaporating brine over coal fires.
The British empire countries could only sell their raw materials to Britain and could only buy manufactured goods from Britain.
That's not actually quite right. The Imperial Preference system copied the systems used by the USA and Germany at the time which is basically the same principle as the EU operates on today; tariff free to members and sodding huge tariffs and trade barriers to everybody else to advantage member economies over non members.
The thing is, it's not "too rich for the UK", it's just too rich. The US went through a similar experience in the 1980s when Japan, flush with paper money thanks to a real estate bubble and lax lending rules, started buying up American corporations, land, and pretty much anything else for insane prices. At the time, the Americans worried that the Japanese were "taking over", but the reality was quite different: the sellers were winning every deal, and Japan's economy has been circling an overcomplicated electronic toilet for 30 years.
If someone is willing to pay far too much for an asset, it behooves you to take the money and look for other things in which to invest it. It's easy to look at Arm as an opportunity lost, but the real question is what did the former owners do with the 40 billion? Business is no place for sentiment; if I can sell an exciting but mature business with the lion's share of its markets for 60 times earnings and turn it into a dull as dishwater supermarket chain at 10 times earnings, I can replace my entire income -- not just today but for a long time -- and still have 5/6 of the cash left over to invest in more forward-looking growth opportunities like, say, SiFive. Or I can blow it on another speculative bubble like cryptocurrency, whatever floats my boat.
nvidia are going to find that the market for processor cores is not quite like the market for GPUs. Ford, Qualcomm, and Google are not ignorant gamers; they have market power and the ability to make and execute reasoned technology choices. nvidia's reputation precedes them. This move is being made in anticipation of the enormous loss of market share Arm will suffer as a result of nvidia's inevitable rapacious pricing and cost cutting. Those with limited technical teams will be stuck paying much higher prices for their processors or cores; the rest will migrate, and the end result will be far less business at much higher prices. No reason to stick around; when your employer or supplier gets acquired by a bunch of rapacious assholes, you make tracks the day they take away the donuts. If you need a roadmap, ask anyone who was at Sun in 2010. Arm are reading from the same playbook. But economically, this is great for Softbank just as it was great for the former owners. As always, it's all about what you do next. If you're feeling bitter, take the money and found a competitor.
The first staff to leave are always the best ones who can find a better job elsewhere when encouraged to do so.
By the time the takeover happens all that is left is the IP and those staff you can't find other jobs.
Meanwhile a dozen start-ups and competitors have acquired the talent that made the original company such a success.
Any merger/acquisition that materially affects employee benefits is a very naughty move BEFORE the ink has dried. And an especially naughty move would be either company materially or directly affecting the other until the merger/acquisition is complete could be legally dangerous!
I hope the affected Arm employees are speaking to solicitors!
Basically what they're doing I think. Removing any non-contractual perks before any TUPE activities come along and someone argues that the repeated payments were de facto and needed to be transferred over as a protected right.
I suspect that what they've done is technically legal and a way of cancelling it legally before it ends up as a protected term.
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It's much like boiling a lobster. Or boiling anything, in fact: today it's the (seemingly exorbitant, but what do I know) second bonus programme, tomorrow the fresh fruit in the breakroom, next year they cut holidays to the legally required minimum. And while those left behind are unaware they're being cooked, those in greatest demand will be boiling off -- leaving for better opportunities. Because you can't replace them, your workload goes up even as your compensation stagnates or declines. After a couple years of this the company is reduced to a rump of mostly useless dregs, morale is gone, and the remnants have neither the spirit nor the economic ability to fight the new owners, which is to say it's ripe for the conclusion of the takeover.
The first rule of the evil takeover is no one ever believes it when it's explained to them. For some reason you have to experience it for yourself. The second rule, which you can learn only after following the first, is to always be the first one out the door. It only gets worse.
ARM were sold to Japan with a "This is a great sign of the UK economy" so the government proclaimed at the time.
A few years later Japan decides to flog it to America and the UK government moans "We're going to check on this, this could be an anti-competition issue". Yeah, which you fucking caused by agreeing the original fuck sell off. Cocks.
A listed company, owned by banks, pension and hedge funds being sold to a hedge fund owned by banks , pension and sovereign wealth funds isn't necessarily anti-competitive.
If I'm a customer using ARM cores I don't care if it's listed on the FTSE or the NIKKEI - I do care if I can't buy the ARM cores anymore because it's now owned by a direct competitor
It's been coming since 2016 but this is the final nail in the coffin for me. Having just spent the last 6 months hiring anyone under 25 who has opposable thumbs in order to meet the POU targets, they turn round and completely screw them over, with nothing more than a 'sorry, but we had to make tough choices'.
Unfortunately I expect September/October will bring a massive company wide reorg, on a larger scale than September 2018. More tough choices I expect.
seen it often enough in past decades. As stated above, tech staff are the first to be screwed, first out door and first to be missed when buyer discover they bought a shell. But then, buyer companies are usually some kind of vampire into corporate necrophilia with the walking dead.
ARM went on a crazy hiring spree and when you hire that quick it is always a bad sign.
RISC-V will dent their M-class and IoT revenues, server need customised cores. I suspect the costs and outlook aren't looking good now, and perhaps projects internally are slipping because of the inorganic ramp.
Softbank want the deal to go through as well so clutching the purse strings makes sense, they have drastically overpaid for a holding they want to exit.
On the plus side Nvidia shares are not a bad deal.
There have been a few IC acquisitions in Cambridge and the most common pattern is hiring freeze, acquisition then redundancies. When the buyer is a US-listed IC company, redundancy is the better option unless you are an 18th-century masochist. After my last experience I just left the sector.
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