© Reuters. FILE PHOTO: The SoftBank Group Corp logo is displayed at the SoftBank World 2017 conference in Tokyo, Japan, July 20, 2017. REUTERS/Issei Kato
By Jane Lanhee Lee, Josh Horwitz, and Stephen Nellis
OAKLAND, California/SHANGHAI (Reuters) – The China joint venture of SoftBank Group Corp’s chip technology firm Arm Ltd laid off 90-95 employees last week to cope with a challenging business landscape this year, according to three sources. familiar with the situation.
The layoffs come as SoftBank tries to set up a public listing for Arm this year. The China market has been a major source of growth, although a two-year management dispute at the joint venture that resulted in the firing of the former CEO created some challenges.
Two of the sources said those who lost their jobs were mostly research and development engineers. Before the layoffs, Arm China had about 700 employees; there were no layoffs last year when parent Arm Ltd had global layoffs affecting up to 15% of its workforce, according to one of the sources.
Arm China declined to comment.
The layoffs last year came after Nvidia (NASDAQ:) Corp was unable to take over Arm due to regulatory hurdles. The collapse of the sale marked a major setback for SoftBank’s efforts to raise funds when its portfolio valuations are under pressure.
Arm China is the exclusive distributor of Arm licenses in China. It collects the payments and sends them to Arm Ltd, which delivers the technology directly to customers.
One of the sources said some customers are concerned that Arm could change the way it collects royalties, as well as geopolitical tensions between the US and China that could cut off access to Arm technology.
Chinese companies, including Huawei Group and Ali Baba (NYSE:), they have been restricted from using some of Arm’s technology in recent years.
