GlobalFoundries layoffs beginning in Malta
MALTA – GlobalFoundries has started the process of laying off employees in Malta and other sites across the globe as it seeks to reduce its costs amid an expected drop in revenue in 2023.
Although the exact numbers have yet to be revealed, it is expected that they could range locally between 150 and 170 people, based on the company’s plan to reduce its workforce by 5.7 percent. GlobalFoundries employs roughly 3,000 people at its Malta site, which includes its headquarters and Fab 8 chip factory.
GlobalFoundries will have to file what’s known as a WARN notice with the state Department of Labor, so the exact number of local layoffs will be known soon.
On Thursday, GlobalFoundries spokeswoman Erica McGill declined to provide the Malta layoff figure since the process of notifying employees is ongoing.
“As communicated in early December, we have begun the process of notifying impacted employees at our Malta site and plan to complete these notifications by the end of this week,” McGill said. “In line with our company values, impacted employees are being treated with the respect they deserve and are being provided with support throughout this process.”
Although GlobalFoundries reported $2.1 billion in revenue for the third quarter of the year, along with $336 million in profit — both record numbers for the contract chipmaker — it is looking to reduce its spending by $200 million annually as many of its customers are looking to significantly reduce the number of chips they buy next year.
Those customers include companies in the smartphone sector, which has an oversupply problem caused by a drop in demand for the devices as consumers decide to hold onto their older devices amid record inflation.
The equipment used in chip factories is so expensive — a typical machine can costs tens of millions of dollars and some can cost more than $500 million apiece — that chip fab owners must slash overhead when facing any revenue shortfalls lest they lose even more money.
The last time GlobalFoundries had a mass layoff at its Fab 8 campus was in 2019 when the company made a dramatic shift in its business strategy.
The company decided to stop investing in next-generation chip architectures that have huge up-front research and development costs. The company was losing money at that point, and the strategy, which allowed the company to reduce costs significantly without losing any market share, put the company on a path to profitability,
Then the company laid off 424 workers at Fab 8 and another 31 that had been doing research at Albany Nanotech. The company now focuses on more middle-of-the-road chips that require less development spending and that are in huge demand with the proliferation of semiconductors being used in everyday devices, from refrigerators to cars.
