MALTA – Even after reporting a record third quarter, microchip manufacturer GlobalFoundries will lay off employees and implement a hiring freeze, according to the company.
It’s unclear whether employees at the Malta location will be impacted.
According to Bloomberg News the company informed employees Friday of the forthcoming reductions in employees. The company has also announced it needed to lower expenses by $200 million annually, according to Bloomberg.
This all comes as the company announced on Nov. 8 a record third quarter with revenue up 22% year over year and a record gross margin of 29.4%.
“We just announced strong third quarter financials with solid fourth quarter guidance,’ said Michael Mullaney, a spokesperson from the company. “However, based on the current macroeconomic environment, we are taking a very disciplined, proactive approach to contain costs and like many in our industry and across the technology sector, we too, are initiating a hiring freeze and taking a set of focused actions to selectively reduce our workforce.”
The company was poised to build a second factory in Malta called Fab 8.2 if product demand continued.
The original chip factory, called Fab 8.0, employs roughly 3,000 people and is currently undergoing a $1 billion-plus expansion of its production capacity. In July the company said preliminary work was being done on the second factory.
The company has declined to discuss further details on the cuts, hiring freeze or impact in Malta.
The company employs approximately 15,000 people around the world.
In late September the company filed a Worker Adjustment and Retraining Notification with the state indicating it had sold its East Fishkill plant, which had employed 1,056 people, to ON Semiconductor Corporation. ON did make offers to employees of the plant, according to the WARN filing.
It is not the first time the company has laid people off. In 2018 the company cut 455 jobs in the Capital Region, with Malta being disproportionately affected.
Saratoga County Chamber of Commerce Executive Director Todd Shimkus said the company isn’t alone in worrying about what the future might hold given the economic climate.
“I am talking to a lot of firms anxious with what will transpire with higher interest rates, rising inflation, and efforts to slow down our economy, so GF is not alone, especially within the semiconductor industry,” he said. “Locally, it’s important to understand that the industry is cyclical and the hope is that whatever slowdown we might face will be short lived.”