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 Dentist who illegally killed Cecil the lion blames local guides for the scandal
- 2 Kate Winslet thanked 'particularly horrible' girl who bullied her at school after Titanic success
- 3 Norwich paedophile ring: Woman at centre of gang who made children 'sexual play things' guilty of 23 offences
- 4 Black and ethnic minority people twice as likely to be hit by Tory cuts than white people, report finds
- 5 Walter Palmer: American dentist revealed as the killer of Cecil the lion in Zimbabwe
Dentist who illegally killed Cecil the lion blames local guides for the scandal
Kate Winslet thanked 'particularly horrible' girl who bullied her at school after Titanic success
Norwich paedophile ring: Woman at centre of gang who made children 'sexual play things' guilty of 23 offences
Black and ethnic minority people twice as likely to be hit by Tory cuts than white people, report finds
Walter Palmer: American dentist revealed as the killer of Cecil the lion in Zimbabwe
Labour leadership contender Jeremy Corbyn says 'we can learn a great deal from Karl Marx'
The last thing Labour needs is a leader like Jeremy Corbyn who people want to vote for
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn – or a return to a Labour government
I am the Jeremy Corbyn supporter that many will tell you doesn't exist
Public anger after French sunbather beaten up by gang for wearing a bikini in Reims park
Labour leadership: New poll shows party is now even 'less electable' than under Ed Miliband
iJobs Money & Business
£22500 - £24500 per annum: Recruitment Genius: Inbound and outbound calls with...
£18000 - £40000 per annum: Recruitment Genius: This fast growing Insurance Bro...
£40 - 45k (DOE) + Benefits: Guru Careers: A Research Associate / Research Anal...
£20000 Per Annum: The Green Recruitment Company: Summary: The Green Recruitm...