GlobalFoundries laying off about 220 at chip plant in Malta

By Larry Rulison | Times Union, Albany

Malta, N.Y. — GlobalFoundries is laying off roughly 220 employees at its Fab 8 campus at the Luther Forest Technology Campus. The terminations are part of its ongoing company-wide cost-cutting program.

Although a job-cut notice filed with the state Department of Labor has yet to be made public, the number of employees being let go was confirmed by a source with direct knowledge of the situation. The so-called WARN notice or Worker Adjustment and Retraining Notification must be filed with the state by companies planning mass layoffs.

GlobalFoundries, which employs 14,000 people worldwide, announced earlier this year that it would be laying off about 800 people as it seeks to reduce annual spending by $200 million. In addition to Fab 8, the company also operates a chip factory in Essex Junction, Vt., which is outside of Burlington. A fab it owns in Dutchess County is being sold off to a company called Onsemi by the end of the month. GlobalFoundries also has manufacturing operations in Asia and Europe.

GlobalFoundries notified the Vermont Department of Labor on Dec. 16 that it was laying off 148 workers at the Essex Junction fab, which employs 2,000.

Last month, GlobalFoundries reported record revenues of $2.1 billion for the third quarter, an increase of 22 percent over the same period last year. Profit for the quarter was $336 million, another record.

Although the company had just revealed record revenue and profit for the third quarter of 2022, the company is expecting key customers will be reducing its chip orders in the next six months as consumer spending on things like smartphones has suffered during record inflation. There is also a risk of recession in 2023.

Since chip factories can cost between $5 billion and $15 billion to build and equip with manufacturing equipment, chipmakers can easily start losing money if their factories are not at full capacity. Therefore the industry is quick to announce layoffs and cost-cutting even when it is profitable.

This round of layoffs at Fab 8 was much smaller than the last mass layoff there. In 2019, as the company was changing its business strategy to stop making next-generation chips in favor of more mainstream products, the company laid off 424 employees at Fab 8 and another 31 at Albany Nanotech where it did next-generation chip research.

The GlobalFoundries layoffs are awkward not only because they are being done around the holidays, but because GlobalFoundries and other chipmakers have been campaigning for the past year for Congress to pass the $52 billion CHIPS Act that provides the industry with billions of dollars in subsidies to expand their manufacturing operations in the U.S. as a counterweight to China’s rise and to re-establish the domestic semiconductor supply chain that has increasingly been moved overseas to Asia.

Despite the cost-cutting program, GlobalFoundries is planning to apply for CHIPS Act funding to expand Fab 8 and upgrade its Vermont plant. Once those projects are completed, it is planning a second fab at Fab 8 — known as Fab 8.2.

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