Arm cuts 40pc of jobs pledged in deal

ARM, one of Britain’s biggest technology companies, has cut 40pc of jobs that were created as part of a pledge by its Japanese owners to ministers when they bought the company.

Softbank bought Arm for £24bn in 2016 and promised to grow Arm’s UK headcount to 3,500, a rise of 1,700 jobs. But it has since cut 40pc of those newly created roles, the FT reported, after The Daily Telegraph first revealed plans by chief executive Rene Haas to make hundreds of workers redundant in March.

When it bought Arm, Softbank made binding pledges to the UK’S Takeover Panel, saying that the hires were to be technical employees, ensuring that Arm’s world-leading chip design technology remained in Cambridge.

Under the terms of the pledges, about three quarters of new hires had to be tech specialists based in the city. Arm sources said this year’s headcount reductions had mainly fallen on administrative back-office staff rather than technical personnel. The company has 370 jobs advertised in the UK.

An Arm spokesman said: “Arm’s current global headcount is in line with the needs of the business following a restructure earlier this year, and the separation of the ISG business from Arm in 2021.”

Softbank’s job creation pledge expired in 2021. Since then Arm has engaged in a round of cost-cutting, accelerated by Softbank’s Vision Fund investment arm recording losses of $23bn (£20.3bn) this year.

As part of its drive to shore up its balance sheet, Softbank plans to float Arm in New York, in spite of overtures from Liz Truss and top ministers.

Plans to sell Arm to American chip design rival Nvidia collapsed in February, prompting Softbank to announce a public flotation instead.

The British company recorded sales of $719m for the first three months of this year, up 6pc on the previous year.