Chip designer ARM cuts 10% of workforce
Wednesday 16 October 2002
The chip designer ARM Holdings yesterday unveiled plans to cut 10 per cent of its workforce, just two weeks after warning its third-quarter profits would be around half the forecast level.
The Cambridge-based group plans to cut around 80 jobs by the end of the year, at a cost of about £2m, in an effort to wipe £5m a year off its cost base. It had previously insisted there would be no redundancies among its 800-strong workforce after imposing a hiring freeze. The move sparked market fears an upturn in trading was still some way off and shares in ARM closed down 4 per cent at 44.5p. "A 10 per cent staff cut suggests recovery is not imminent," said analysts at UBS Warburg.
ARM added to the pain by reiterating that revenues were likely to be "flattish" for the "foreseeable future" after customers dramatically reined in their spending. "We are taking a cautious view of the revenue outlook in the short to medium term," the company said, adding the timing of closing new license deals remained "unpredictable".
It confirmed yesterday that pre-tax profits were £8m in the third quarter to 30 September, well beneath the £12.9m profit it made in the same three-month period a year before.
ARM, whose chip technology is used in mobile phones and other devices, had previously enjoyed 18 consecutive quarters of growth. Revenues in the third quarter, it said, were £33.3m, a 23 per cent drop from the second quarter and an 11 per cent drop from the same quarter a year ago.
The company reiterated that its long-term growth indicators remained "healthy".
"Even though the length and severity of the current semiconductor industry downturn has now impacted ARM's financial results, we are confident that [our] business model remains resilient," said Warren East, chief executive.
- 1 'Not suppost to cry': 9-year-old lists the worst things about being a boy
- 2 To help fuel their propaganda machine against the poor, our government has now decided to redefine the word 'welfare'
- 3 Anti-gay hate preacher accidentally tweets 4,000 followers cartoon clip of him 'confessing' to be a 'homosexual sodomite'
- 4 Woman opens professional cuddling shop – gets 10,000 customers in first week
- 5 Grayson Perry: London needs affordable housing because 'rich people don't create culture'
Ryan Gosling granted temporary restraining order against a woman 'convinced she was his twin flame'
Jennifer Lawrence sings in new The Hunger Games: Mockingjay Pt 1 clip on YouTube
Anti-gay hate preacher accidentally tweets 4,000 followers cartoon clip of him 'confessing' to be a 'homosexual sodomite'
Woman opens professional cuddling shop – gets 10,000 customers in first week
Grayson Perry: London needs affordable housing because 'rich people don't create culture'
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
Rochester by-election: Labour MP Emily Thornberry resigns after posting white van and England flags tweet
France 'blocks' Russian sailors from boarding a warship
Revealed: How the world gets rich – from privatising British public services
Myleene Klass: Ed Miliband 'strikes back' by comparing UK's need for Labour's mansion tax to Hear'Say track
iJobs Money & Business
Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...
Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...
£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...