back to article UK's largest union to Arm: Freeze job cuts now

One of Britain's largest unions, Unite, is calling on chip designer Arm's management to pause an ongoing redundancy process and "open up the books" for closer inspection to reveal the company's "true" financial health. Arm CEO Rene Haas recently wrote to employees warning of a need to "stay competitive" and "remove duplication …

  1. Mike 137 Silver badge

    "the right thing to do"

    For "Although it is the right thing to do for Arm's future, this is not going to be easy."

    read: "Although it is the right thing to do for Arm's future, this is not going to be easy for you. It won't touch shareholders, directors or top management, so we're safe."

    1. ShadowSystems

      Re: "the right thing to do"

      Would be to start pruning from the top down until the savings have been made to insure the health of the company. If a tree needs to be cut back to keep it healthy, you don't start by chopping off the roots.

      1. J.G.Harston Silver badge

        Re: "the right thing to do"

        A better strategy would be to ensure the health of the company. Having to resort to insuring the health of the company shows you have no faith in your forward planning.

    2. Cederic Silver badge

      Re: "the right thing to do"

      That's quite an assumption.

      My experience is that cost conscious organisations have high turnover in senior positions, because senior people are expensive.

      Indeed, role life expectancy at one FTSE100 for people at VP level was around two years, as opposed to the myriad of employees with two decades at the company.

      Some of that was the lucky few with two decades then two years at VP to assure their final salary pension taunted the rest of us but mostly it was cost cutting.

      That means there's often less slack at senior levels, and also means that if you're closing down less profitable parts of the business then the senior manager roles looking after those will also be eliminated.

      1. Tom 7

        Re: "the right thing to do"

        "role life expectancy at one FTSE100 for people at VP level was around two years" so they're getting in and out before they can reliably find a coffee machine without help and they claim massive salaries and bonuses for surfing their own paper wave.

        1. Big Softie

          Re: "the right thing to do"

          Spot on !!

  2. Headley_Grange Silver badge

    Cynical? Me?

    The cynic in me says that the Arm board members had mentally banked the bonuses they'd have got from the NVIDIA buyout and are now trying to make the money somewhere else.

    1. Anonymous Coward
      Anonymous Coward

      Re: Cynical? Me?

      That combined with a "fuck you Government" response to the regulator's intervention.

  3. cantankerous swineherd

    Unite have an approx £35 million strike fund. might be good to get on board?

    1. Roland6 Silver badge
      Pint

      £35M.. perhaps they should put in an offer and take ARM off Softbank...

  4. Martin hepworth

    moving to Atlanta

    From what I see of friends that work in ARM they are heavily recruiting in Atlanta , seems more of a geographic 'rebalance' to me

  5. fg_swe Bronze badge

    Weak Profitability

    So ARM makes 2000 Millions of revenue and less than a million in profits ?

    Other IT companies make 200 million profit on 2000 Million of revenue.

    Being financially weak is absolutely dangerous and nasty things can happen.

    Would any one of you invest your own capital in ARM ?

    Assuming a market cap of 30 billions*: Safer to put it into an account and get 0,5% instead of 0,003%.

    Every sane man will conclude that something is badly wrong with the company. Probably the licenses are given away too cheap.

    Another explanation could be that ARM is growing too aggressively, given their 40% revenue growth. Either way, does not look great.

    *which is very generous, given 2 billion of revenue and almost nil profts.

    1. Doctor Syntax Silver badge

      Re: Weak Profitability

      It might be worth looking at any payments they might be making to SoftBank under the headings of IP or Services.

      1. Anonymous Coward
        Anonymous Coward

        Re: Weak Profitability

        or a "management" entity siphoning off the majority of the profit

      2. Roland6 Silver badge

        Re: Weak Profitability

        and loan repayment .

        Remember Softbank almost certainly brought ARM with debt, which on successful completion of purchase they transferred to ARM.

        1. Yet Another Anonymous coward Silver badge

          Re: Weak Profitability

          Licensing is a shite business to be in.

          It costs a fortune to employ vast numbers of clever buggers and your revenue = a couple of pence less than it would cost your customer to use an open source design for themselves.

  6. JohnMurray

    On the other hand...

    ..moving the business to the states would make a lot of sense.

    No whining about combining with nvidea there..

    1. Doctor Syntax Silver badge

      Re: On the other hand...

      They were getting slapped by regulators all over the globe about that merger. There's no reason to suppose that that would be any different if they were based in the US, they still need to do business globally.

    2. Tams

      Re: On the other hand...

      It wasnct whining, and it was the FTC getting involved that really killed the deal.

  7. Anonymous Coward
    Anonymous Coward

    These are highly skilled technology workers. They can't afford to lose their jobs

    Erm. These statements don't go together.

    1. Anonymous Coward
      Anonymous Coward

      Unions have never had much to do with logic.

    2. fg_swe Bronze badge

      What They Mean

      "Europe is very weak in the semiconductor business. There are not too many British alternatives outside ARM for them, if they want to continue their specialization".

      Moving to Infineon, NXP or STM is probably not easy, given the language and culture barriers. At least not as easy as moving to one of 250 other companies of this type in the SF area.

      Of course this line of thinking is a bit destructive. There are probably many computer science jobs in the UK outside ARM. If the chip companies are not interested, there are automotive, aerospace, rail, tool machines, instruments, banking, medical, etc etc.

      Politicians here are incapable of replicating the Airbus success story in computers and semiconductors. No Franz Josef Strauss and no General de Gaulle around...

      And of course the Americans will try to sabotage it with all of their power instruments from lawyers to defamation experts. Lets see how they reign into Ursula...

  8. Danny 2

    Piss & Off

    ARM should/could relocate it's R&D to P&O ferries to avoid minimum wage.

    Or...we briefly nationalise it so the current incompetent management can be replaced. ARM is a vital national asset in current circumstances. As is P&O.

    1. Headley_Grange Silver badge

      Re: Piss & Off

      P&O Ferries is an example of a business where I'd like "sunk cost" to be taken literally.

    2. fg_swe Bronze badge

      Or

      ...stop being a gear in the American Moneyspinning gearbox. Google is making something in the order of 100 billion in profits every year.

      ARM could attack them head-on and create+sell phones based on Linux, efficient programming* (no Java waste) and full data protection+privacy. Team up with Canonical, Bull (whatever funny name they now have), the finnish, Trolltech etc.

      But that would require initiative, creativity, a bit of capital and daring. Most of which is lacking in western Europe these days. Instead we have this clueless WEF-programmed robot elite.

      *something like this: http://sappeur.ddnss.de/

      1. Robert Grant

        Re: Or

        I would say that would require an enormous amount of capital. Selling phones is a good way to become a millionaire, but to start you'd need to be a billionnaire.

        1. UdoGoetz

          Of Course

          Creating a european competitor to IPhone and Android requires a very smart strategy and a certain amount of capital.

          BUT - remember that we once were leaders in mobile phones through Nokia. We were leaders in developing the (then) state of the art digital phone standard GSM !

          We have all the pieces required:

          +Qt as the GUI

          +Linux or FreeBSD as OS

          +ARM CPU

          +Canonicals Ubuntu Touch

          +Olimex

          +ublox creating modems and GNSS receivers

          +seL4 high security microkernel

          So - the pieces must be put together and a bit of polish applied. Probably start with a chinese HW platform and just port the software initially. In Generation 3 we could switch to hardware made in Bulgaria, for example.

          Unique Value Proposition: Root Access for Everybody and No Spyware Whatsoever. Neither Apple nor Google can deliver that.

          Of course we would need some sort of "IT-Airbus" to tie this together, do the marketing, sales, logistics, coordination and of course finance.

          1. UdoGoetz

            Must read

            "root access and full control for the owner"

          2. Robert Grant

            Re: Of Course

            The problem isn't all that, it's the app ecosystem. Look at Windows Phone. MS made what even today is still an awesome IDE, and supported lots of apps being made for it, and they lost their shirts. If you can't get all the apps you want, you probably won't buy the phone.

  9. martinusher Silver badge

    Standard Operating Procedure

    One of the downsides of being acquired (and an IPO is a form of acquisition) is the company takes on a lot of debt -- the price doesn't reflect the value today but is partly based on estimates of future revenue. That debt is what makes the principals and other insiders rich. The company then has to service that debt and to do this it cuts costs. One of the principal ways to do this is to reduce headcount, either thinning down activities or offshoring the work to where its cheapest.

    Working for a closely held (private) company has its downsides -- usually the idiosyncrasies of its owner -- but provided the owner is focused on the company and not just using it as a cash cow its a good place to work. Once the MBAs get hold of it decay will inevitably follow as underperforming assets are turned into debit, lining various pockets in the process, until the company becomes a shell.

  10. Anonymous Coward
    Anonymous Coward

    Arms finances are not the union's damned business. They are EMPLOYEES, not management.

    1. Ken Hagan Gold badge

      If you want them (or anyone) to remain as employees, you ought to treat them nicely. If all of ARM's cleaning staff walked out, the management could probably find replacements and save a few pennies into the bargain. If all their chip designers walk out, they don't have a company anymore. They're fucked, with the proverbial wrought iron fence wrapped in curare tipped barbed wire.

      (With due apologies to cleaning staff, but they are probably already aware of this. On the other hand, I don't think anyone believes that this is the 15% of the workforce that ARM's management have in their sights.)

      1. pimppetgaeghsr

        Already happening to SiFive, Imgtec, Apple, Nvidia, Qcom/Nuvia.

        Arm can survive a long time with its previous track record for engineering development, but once all the people that built it leave and demotivated people saddled with slowly falling stock units are left running the show the end is nigh.

        I suspect in the long run a switch to royalty only revenue since all major tech companies will make their own ARM implementations or RISC-V. They are already getting bullied out of the microcontroller segment as nobody wants to front up millions for something they can download from Github.

    2. cantankerous swineherd

      lol, paging Sharon Graham.

    3. martinusher Silver badge

      I left the UK about 36 years ago because of that damn attitude. You'd be surprised just how many industries have disappeared from the UK over my working life and its all because of that mindset and the focus on excessive financialization, industry just being a tool to generate cashflow for the financial engineers. ARM is one of the exceptions to the rule and the people who work there don't want to see it disappear.

      Incidentally, I moved to the US where we got a good 20 years before the rot set in here in earnest. We've been focused entirely on the numbers, exporting jobs right and left, until like the UK we now have a shortage of critical skills. (We've got thousands -- millions -- of people who do a mean Powerpoint and know how to get the answers they want from Excel but surprisingly few people who can do anything. We call it a "chronic skills shortage". I call it "We exported all the real work to China".)

      1. UdoGoetz

        DJT

        Mr Trump tried to reverse this, but see what happened to him. Look who attacked him.

  11. J.G.Harston Silver badge

    What does ARM do with 6000 employees? It was created by four people.

    1. Robin

      What does Tesco do with hundreds of thousands of employees? It was started by one guy.

    2. pimppetgaeghsr

      Spends a lot of time on corporate comms and events, catered lunches, pointless meetings and endless micro-managment of engineers by people who know nothing of the industry or technology.

      Their state enforced hiring destroyed the company and now they are trying to undo a lot of it. Shame they aren't freeing up more engineers because few departments actually produce anything and only the CPU department is profitable. 90:10 rule in action.

  12. Scott Pedigo
    Coat

    Now That We Are One Arm

    we have to watch out for that fugitive doctor who is chasing us!

  13. Potemkine! Silver badge

    "more disciplined about costs"

    Let's start this from the Board. Reduce the salaries, bonuses and other incentives for all the members of the board from the same percentage the workforce is reduced. They fire 10% of the people: they get 10% less.

  14. Pianoman99

    Dis-unite

    How do you know they can’t afford to lose their jobs? And how can you state that the U.K. can’t afford to lose these skills?

    Both statements are disingenuous at best. They’ll get severance pay and will be lining up new jobs pdq.

    Go focus on P&O ferries.

  15. Anonymous Coward
    Anonymous Coward

    ARM = sinking ship

    Arm has had a very serious problem for 15 years! Their CPU instruction set is very well designed which means everyone is eager to license it for power efficient chips. The list of companies depending on ARM includes Apple, Qualcomm, Nvidia, Amazon, raspberry Pi, and many others.

    But even though they license the instructions set customers are no longer licensing the vlsi layouts!

    The problem is they just have no talent in Chip design any more! They have been slacking off for at least 10 years! It became obvious when Qualcomm had to start the Snapdragon project because arm designs were so power inefficient! Management must be wasting a lot of money on yachts and under-paying their chip designers! These days I estimate their most popular designs (a73) are 6 years behind the rest of the industry! When Qualcomm got in trouble and had to use the 64-bit A73 arm design in desperation for Snapdragon 820 it overheated so badly that the company was almost ruined!

    I learned this when I recently purchased several raspberry pi devices. I wondered why my pi4 was so slow. When I looked up the benchmark numbers it was exactly equal to many cell phones from 2015! You can see for yourself!

    Is there no wonder that they need a big kick in the pants like Intel got from AMD over the past 5 years?

    1. pimppetgaeghsr

      Re: ARM = sinking ship

      All the talent went to Apple. The place is a cult where people seem to think "arm technology" is in all Apple's chips. That's a fancy way of saying "Apple pays us to NOT make their CPUs."

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