Arm freezes hiring until Nvidia takeover, cancels everyone's 'wellbeing' allowance
- Reference: 1621927747
- News link: https://www.theregister.co.uk/2021/05/25/arm_hiring_allowance_freeze_nvidia/
- Source link:
Not only are teams around the world not allowed to hire, but also positions cannot be backfilled when employees leave. Any open roles are now on hold. In addition, Arm canceled an annual "wellbeing" allowance, a move those who spoke to The Register said is effectively a pay cut, and a significant one at that for graduates and other lower-paid staffers.
The hiring freeze, which came into force this month, affects Arm's chip design wing – its IP Products Group, or IPG – though The Register understands hiring in other departments, such as sales, marketing, finance, HR, and operations, has slowed to a trickle.
[1]
[2]
[3]
IPG president Rene Haas must personally authorize any backfill requests. The default answer will be no. Contractors cannot be taken on either, and fixed-term contract work is frozen, too.
Staff were told that Arm was ahead of its hiring plans – it increased its headcount by eight per cent in the past year – and now needed to ensure it is "within the cost targets for the business." Nvidia is trying to [4]acquire UK-headquartered Arm for $40bn, a takeover the British government is [5]scrutinizing to see if there is a clash with its national security interests.
In an FAQ shared with staff regarding the freeze, and seen by The Register , Arm bosses stated:
The primary reason for this is that due to the accelerated hiring in the past six months, we are well ahead of our planned headcount. The market response has been fantastic, the selection process rigorous, and we have hired some exceptional people into Arm from across the globe.
We are pleased to welcome these new hires from early careers through to experienced business leaders. However, we now need to take this action to ensure we are within the cost targets for the business.
"We expect this will last until the Nvidia deal closes, which we currently anticipate will be in April 2022," the document continued. Staff were also told that Arm's future hiring plans will be formed in discussion with Nvidia and that "closer to [the acquisition's] close, we will update you then."
The majority of graduate positions and internships have been filled, and any open roles have been closed. Arm had "already pulled back on a small number of UK graduate roles after a review," the FAQ stated.
Wellbeing allowance scrapped
Arm has also canceled its FlexPot scheme: this was an annual allowance granted to employees and fixed-term contract workers, the size of which was determined by location. In the UK, the allowance would be £4,500 per person, and in the US $8,500. The Register understands this perk was introduced after Arm went private in 2016, when it was [6]acquired by Softbank, and replaced a scheme that distributed shares to employees.
Staff were told FlexPot could be used to fund, per internal documents, "activities that support you and your family’s health or financial wellbeing," and "any activities that allow you to learn something new." In reality, this could be used to expense anything management would approve – investments in share funds, summer camps for children, home insurance and rental deposits, personal trainers, scuba diving, school tuition fees, dance lessons, art classes... the list is quite long and fairly open ended.
[7]Arm at 30: From Cambridge to the world, one plucky British startup changed everything
[8]Arm pulls the sheets off its latest Armv9 architecture with added AI support, Realms software isolation
[9]Heads up: From 2022, all new top-end Arm Cortex-A CPU cores for phones, slabtops will be 64-bit-only, snub 32-bit
[10]Four years after swallowing Arm Holdings, SoftBank said to be mulling Brit chip biz sale
Although FlexPot was not guaranteed every year, staff came to rely on it, and it was due to continue running in 2021 until it was canceled this month. No reason was given, a source told us. For graduates and lower-paid staff, the allowance amounted to 10 per cent or more of their take-home compensation, even taking into account a bonus people were paid this past quarter as Arm has been performing well financially, they added.
Staff were told in a quarterly business update that the company had exceeded its goals. However, FlexPot will be no more. It may return in one form or another depending on how the Nvidia acquisition goes, The Reg understands.
[11]
"This is happening at a time when nobody knows what will happen to staff after the Nvidia deal goes through, assuming it does," one person close to the matter told us.
Phil Hughes, Arm's vice president for external communications, told The Register :
This year is about executing on our strategy and preparing for a new chapter which will bring significant additional rewards for our people. Arm, like all companies, adjusts its benefits periodically as necessary, but we always ensure our people understand why we are making changes as keeping them well-informed, motivated and rewarded is vital as they are the core of our success.
We note that Arm recorded $1.98bn in revenue in the 12 months to March 31, up 9.5 per cent year-on-year, and a loss of $312m that Softbank said in a financial report
[12]PDF
was mainly due to charges linked to Nvidia's proposed acquisition and share-based remuneration for Arm staff. Softbank also said Arm's bottom line was affected by the extra hands it had taken on.Separately, El Reg has heard that Arm, which employs about 6,200 people globally, increased the healthcare benefits of its staff and their families in India, and granted workers with families in the COVID-19-ravaged nation extended leave to be with their relatives during the pandemic.
On Friday, Nvidia announced a four-for-one stock split, and closed Monday with its share price up four per cent to $624.48 apiece. ®
Get our [13]Tech Resources
[1] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YKzKwuWz5scebtqfDAipbgAAAFA&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YKzKwuWz5scebtqfDAipbgAAAFA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YKzKwuWz5scebtqfDAipbgAAAFA&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[4] https://www.theregister.com/2020/09/14/nvida_arm_acquisition/
[5] https://www.theregister.com/2021/04/19/digital_secretary_oliver_dowden_nivida_arm/
[6] https://www.theregister.com/2016/07/18/softbank_to_buy_arm/
[7] https://www.theregister.com/2020/12/01/arm_at_30/
[8] https://www.theregister.com/2021/03/30/arm_v9_chips/
[9] https://www.theregister.com/2020/10/08/arm_32bit_support/
[10] https://www.theregister.com/2020/07/14/softbank_considering_arm_sale_report/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YKzKwuWz5scebtqfDAipbgAAAFA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[12] https://group.softbank/en/system/files/financial-report_q4fy2020_01_en.pdf?file=pdf/ir/financials/financial_reports/financial-report_q4fy2020_01_en.pdf
[13] https://whitepapers.theregister.com/
Morale boost
This is an exceptionally blinkered move by management driven by bean counting.
A company at the top of it's game and a desirable acquisition destroys the morale of the people who put it there without explaining anything to them.
Then is prepared to hold itself in stasis for a yearand wont even fill vacant positions that are possibly crucial.
Still, what do I know? I haven't got an MBA.
This is a good idea
This is probably a good idea... because NVidia doesn't give one f@#$ about your wellbeing, whether you're a customer or an employee. All Jen cares about is profits at any cost, no matter how many defective solder joints it takes. Get used to being a just a crunchy cog in the wheel of profits, you pathetic worms.
Ah yes, the flexpot.
Before the Softbank takeover, ARM's actual salaries (in the UK, anyway) were regarded internally as being below the market rate, but made up for with shares.
The share distribution stopped when Softbank bought ARM (because giving UK employees shares in a Japanese company was more complicated than they wanted to deal with), and employees anticipated (or naively hoped) that salaries would be adjusted to make the total compensation about the same. Of course, salaries stayed the same, and the flexpot scheme was introduced instead, so people went from salary+shares to salary+discount on yoga classes. Around that time, I left (and indeed found that the market rate salaries were somewhat higher).
"Arm, like all companies, adjusts its benefits periodically as necessary, but we always ensure our people understand why we are making changes as keeping them well-informed, motivated and rewarded is vital as they are the core of our success."
Except you didn't tell them why you were cutting the welfare allowance...
Flim Flammery
1 - Why is there no UK interest in ARM?
2 - How hard are the board hoping no execs need to exit the business?
3 - Flexpot (and schemes like it) requires the OK of management to use. Yet it is part of their compensation. Any employment lawyers here?
4 - I would be hugely amused if, after the sale, and most employees realize they've been shafted, again, the majority of the workforce resigns.
Re: Flim Flammery
Your point 4 could work out very nicely for SiFive, if they're happy to take people on long-term remote.
Re: Flim Flammery
"the majority of the workforce resigns" and Cambridge Science Park turns into The Hunger Games.
Re: Flim Flammery
There is no UK interest in ARM because Softbank paid a stupid price for it, which they want to recoup.
The stupid price Softbank paid is for reference ~twenty years worth of ARM's yearly revenue and ~64 times their yearly profits. Softbank had presumably hoped to quadruple the licensing to make up for this, however when tried people started looking at switching to other things, and Softbank realised that they'd fucked up and started looking at selling ARM.
Therefore at the asking price it doesn't make financial reason for anybody to buy at the asking price which is roughly half the UK yearly defence budget, and which would be recouped circa 2085.
In fact, I suspect that the only people it would make sense to buy ARM for is Intel to maintain their chippery monopoly (which would surely be blocked by any sane competition authority) or AMD or Nvidia to expand their IP and to muscle their way into more markets.
Hmm
I wonder who green-lighted that? They obviously know something we do not.
The fix is in.
Optional bonus scheme
Worked for a company in Cambridge which, when I joined, paid out a 10% bonus for 38 of the last 40 years. Guess what? In the 3.5 years I was there, they didn't pay out. After I left, they started paying it again. I can only conclude it was me.
This always ends well...
The first staff to leave are always the best ones who can find a better job elsewhere when encouraged to do so.
By the time the takeover happens all that is left is the IP and those staff you can't find other jobs.
Meanwhile a dozen start-ups and competitors have acquired the talent that made the original company such a success.
So you can pretend to take over a company that is really a competitor
and manage to hold it back a good year without even buying it up - assuming the UK government does actually agree which probably depends on some offshore donations rather thannational interest .