Softbank Group Corp’s chip technology firm Arm Ltd’s joint venture in China laid off 90 to 95 employees last week to cope with a challenging business outlook this year, two sources familiar with the situation said.
The layoffs come as Softbank tries to set up a public listing for Arm this year.
The Chinese market has been a major source of growth, although a two-year management dispute at the joint venture that resulted in the ousting of former chief executive officer Allen Wu (吳雄昂) created some challenges.
Photo: AP
The sources said those who lost their jobs were mostly engineers in research and development.
Before the layoffs, Arm China had about 700 employees. There were no layoffs last year when parent Arm Ltd had global layoffs affecting about 15 percent of its workforce, one of the sources said.
Arm China declined to comment.
“Arm China is a separate company from Arm Ltd, and while we cannot comment on its personnel decisions, we do not expect any disruption to our business in China, which continues to remain strong,” Arm Ltd said in a statement.
Last year’s layoffs came after Nvidia Corp failed to take over Arm because of regulatory hurdles.
The collapse of the sale marked a major setback for Softbank’s efforts to generate funds when valuations across its portfolio are under pressure.
Arm China is the exclusive distributor of Arm licenses in China. It collects payments and sends them to Arm Ltd, which delivers the technology directly to customers.
Some customers are concerned about Arm potentially changing how it charges royalties, as well as US-China geopolitical tensions that could cut off access to Arm technology, one of the sources said.
Chinese companies, including Huawei Technologies Co (華為) and Alibaba Group Holding Ltd (阿里巴巴), have been restricted from using some of Arm’s technology in recent years.
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