British tech champion Arm axes UK jobs as it prepares New York listing

Britain’s biggest technology company Arm is cutting one in 10 jobs at its UK headquarters as its Japanese owners prepare to float the $60bn (£48bn) semiconductor giant in America.

Staff at Arm’s Cambridge headquarters have been prepared to expect 340 to 350 job losses in the UK, around a tenth of its 3,560 British staff, The Telegraph understands.

It comes as ministers are urged to encourage Arm to list in London, potentially through acquiring a stake or golden share to secure Arm's status as a British strategic asset.

Arm’s total job losses, expected to be largely completed this month, affect 1,000 staff globally or 15pc of its workforce. The Telegraph revealed in March that the company planned to cut up between 12pc and 15pc of employees.

Its chief executive Rene Haas told staff in March that it needed to cut jobs to remain competitive and “stop work that is no longer critical to our future success”.

The losses come despite Arm enjoying record profits and sales in the last year. The company grew annual revenues by a third and profits rose by two thirds to $1bn in its last fiscal year.

Arm, whose microchip designs power the world’s smartphones, tablets and billions of other internet-connected gadgets, was founded in Cambridge in 1990 and was listed in London for almost two decades before SoftBank paid £24bn for the company in 2016.

SoftBank is planning to float the company in the next year after regulators scuppered a $40bn sale to the Silicon Valley microchip company Nvidia.

Boris Johnson has written to SoftBank seeking to encourage the company to list Arm in London, but New York’s tech-heavy Nasdaq exchange is seen as a much more likely destination.

Arm has been consulting on redundancies with staff for weeks. Its engineering division which develops the company’s intellectual property has largely been spared from the cuts, which have fallen more heavily on areas such as sales, internal functions and research, which collaborates with academia on cutting-edge science.

The cuts come as ministers develop a semiconductor strategy designed to protect Britain’s supplies of vital components as the world reels from a shortage of chips. Arm is the UK’s most successful semiconductor strategy and ministers have been urged to invest in the company to protect strategic interests.

Tom Tugendhat, the chair of the Commons Foreign Affairs Select Committee, said last week that the taxpayer should take a 25.1pc stake in the company “to facilitate, support and, if necessary, compel a London-based IPO”.

Arm is cutting jobs after the expiry of five-year agreement to double staff numbers, made with Theresa May when SoftBank bought the company in 2016. Tudor Browne, Arm’s co-founder, said the jobs agreement was a mistake. 

He said: “The deal Softbank did with Theresa May was complete lunacy, they should never have agreed to ramp up the hiring rate they did,” he said.

Matthew Whaley of the Unite union, which represents Arm staff, said: “Arm is a hugely profitable UK company that supports skilled, well paid jobs. There is no justification for slashing the jobs of workers who have helped to make Arm a world leader in microprocessor technology.

“Arm is currently preparing for an IPO and many in the workforce feel that flotation is being prioritised over the long term sustainability of the company and the wellbeing of the workforce. Given the strategic importance of this company to the UK, there is a strong case for the government to intervene to protect our scientific capabilities.”

Arm did not comment.