GlobalFoundries announces layoffs of 800 employees, thousands of Intel employees furloughed

International semiconductor company GlobalFoundries, which has a large chip factory in Essex Junction, told staff at a staff meeting on Thursday morning that it would cut up to 800 jobs worldwide in December.

"As part of our most recent all-hands meeting, we shared the cost-saving actions we are taking across the business in response to the current macroeconomic environment, including reducing corporate and manufacturing overhead costs and selectively reducing headcount positions globally. 800 employees by the end of the year,” company spokesperson Julie Moynehan said in an email to VTDigger.

Moynehan declined to comment further.

These 800 employees represent 5.7% of GlobalFoundries' 14,000 employees worldwide.

GlobalFoundries CEO Tom Caulfield emphasized that most of the job losses will be in non-manufacturing roles, such as senior executives, said an employee at the Essex Junction plant who attended the meeting virtually.

The employee, who spoke on condition of anonymity out of fear of retaliation for speaking out about the company, said the layoffs were "less than I originally thought."

"I'm still concerned," the employee said.

Staff can also choose to attend meetings in person at GlobalFoundries facilities around the world.

The company has approximately 2,000 employees and 800 contractors working at its Essex Junction facility.

Caulfield did not disclose how many jobs would be laid off in Vermont, but said employees in the U.S. and Singapore will receive layoff notices next week, according to the employee. Employees there would be notified later because of stricter laws protecting workers in Germany, the employee said. The company is headquartered in Malta, New York, with facilities in Vermont, New York, Singapore and Germany.

The employee said Caulfield and other executives failed to answer numerous questions about why the company's recent profits couldn't be used to save jobs.

GlobalFoundries' revenue at the end of the third quarter was up 22% from the previous year. In October, the company announced a $30 million grant to develop advanced semiconductors in Essex Junction. That same month, the Vermont Public Utilities Commission approved the company's request to create its own electric utility to save on electricity bills.

Then, in meetings with Wall Street analysts and employees in recent weeks, Caulfield warned that the company would have to cut costs to prepare for lower demand for semiconductors as the world economy slowed and faced a possible recession.

Thousands of employees at tech giant Intel's Irish factory in Kildare have been put on unpaid leave for up to three months as the company looks to cut costs.

The company has said in recent months that it will cut thousands of jobs globally due to inflation and a slowdown in the PC market.

The proposal is understood to be aimed at workers in the company's manufacturing arm, where the majority of the tech giant's 5,000 Irish staff work. Intel is one of Ireland's largest employers and contributes significantly to the country's GDP and tax revenue.

After announcing its October earnings, the company said it would cut jobs and slow spending on new factories in an effort to save $3 billion (2.84 billion euros) next year. As Business Post first reported, they hope to save up to $10 billion by 2025.

In a statement to the Irish Examiner, the company said: “In our recent earnings call, we announced significant steps to reduce costs and improve efficiencies, while carefully protecting what is needed to accelerate our transformation and position us for long-term growth investment.

"Retaining our manufacturing talent is a key element of Intel's long-term growth. The voluntary furlough program gives us the opportunity to reduce short-term costs and provide employees with attractive time off options. Manufacturing talent is an important part of our business in Ireland." "

It is understood that today's announcement will not affect the chipmaker's planned long-term investments.

In March this year, Intel announced that it would invest an additional 12 billion euros in its business in Ireland on top of the previously announced 5 billion euros, bringing Intel's total investment in the Leixlip factory to 30 billion euros.

It is unclear whether the Enterprise Department or its minister Tánaiste Leo Varadkar has been informed of the proposal.