Chipmaker 'GlobalFoundries' to Conduct Job Cuts and Freeze Hiring Soon

GlobalFoundries, known as the biggest provider of semiconductors in the United States, is planning to conduct job cuts and freeze hiring soon after reporting its third-quarter earnings.

Job Cuts & Freeze Hiring

New York-Based GlobalFoundries will begin job cuts and freeze hiring soon, as the company confirms to its employees on Friday. As per Bloomberg's report, no details were confirmed on which division and how many will be affected by the workforce reduction that the company will be implementing.

GlobalFoundries Spokeswoman stated that the company will be focusing more on actions for its workforce despite having a strong third quarter and strong guidance for the fourth quarter. She said that the main reason for job cuts and freeze hiring is because of the current macroeconomic environment as they seek to contain costs. The company will be joining the list of technology-based companies to conduct freeze hiring and job cuts as they faced economic uncertainty.

Despite being a US-based company, GlobalFoundries is majority-owned by the Abu Dhabi government. As they expand the production of domestic chips, GlobalFoundries is also one of the chipmakers that aim to be funded by the government of the United States through the $52 billion CHIPS Act.

Q3 2022

During the earnings call of the company, GlobalFoundries achieved a lot for this quarter. A total of $2.074 billion was obtained by the company for its net revenue, which is higher than the expected digits based on the guidance provided by the company last quarter. The company also adjusted its gross margin stood at 29.9%.

Meanwhile, the company updated the company state on what will happen next for the remaining months of the year. As per Counterpoint's report, GlobalFoundries has received a $30 million budget from the United States Federal Funding as they will be advancing its production and innovation for the next generation of semiconductors to its facility in Essex, Vermont.

The funds the company has obtained will be going to the production of GaN chips, which will be used for improved performance of applications such as 5G smartphones, Rf wireless infrastructure, electric vehicles, power grids, and more.

Chief Executive Officer Tom Caulfield stated that the reported growth of the company of more than 80% this year is not sustainable enough, as he predicted that the automobile market will be providing greater growth through next year.

Based on a report from VTDigger, they expect that the semiconductors will be declining during the first half of 2023, which is what the Chief Financial Officer David Reeder also believed. Despite this, the company still hopes to have things turned around (based on their predictions) and have a higher revenue overall in 2023 than what they did this year.

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Written by Inno Flores