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GlobalFoundries to cut 455 jobs in Capital Region

GlobalFoundries to cut 455 jobs in Capital Region

Fab 8 factory in Malta bears disproportionately large share of worldwide cuts
GlobalFoundries to cut 455 jobs in Capital Region
GlobalFoundries' Malta plant is shown in May 2018.
Photographer: Marc Schultz

MALTA — The job cuts that GlobalFoundries announced Monday will total 455 in the Capital Region: 424 at the computer chip factory in Malta and 31 at an Albany research center.

The company had not initially put a number on the job cuts, but it filed a state-required mass-layoff notice Tuesday and the state Department of Labor posted it online Thursday, revealing the details. The cuts are scheduled to begin Nov. 28.

A company spokesman said Monday and Thursday that GlobalFoundries was cutting less than 5 percent of its global workforce as a result of a strategy change. But he would not provide exact numbers or details.

If the company’s global workforce is 18,000 and its Malta workforce is 3,300 — it has cited those totals in the past but more recently has stopped quantifying its workforce — that would mean the Capital Region workforce is taking more than half of the worldwide job cuts.

The 424 jobs being cut would equal 13 percent of a 3,300-person workforce at the Fab 8 plant in Malta. 

These are typically highly educated and highly trained professionals with large salaries and a proportionately large beneficial impact on the Capital Region’s economy.

The head of Saratoga County’s designated economic development agency said he’s seen worse, but these job cuts are bad news.

“As an economic developer, I never want to see a loss of jobs,” said Marty Vanags, president of the Saratoga County Prosperity Partnership. “We don’t like to see that, plain and simple.

“Where do we go from here? We have reached out to Global and said, ‘We’re here to help you any way we can.'”

That might take the form of assisting laid off employees in finding new jobs. But many of the jobs being cut are likely held by people with specialized skills and experience, who therefore might have limited ability to move quickly into a similar position at another Capital Region employer.

Vanags noted that there is a low jobless rate here and a tight labor market, so good employees are in demand.  

“I don’t know who’s being laid off, I don’t know their background and skills,” he said.

GlobalFoundries is one of the key components of the Capital Region’s technology sector, not just with Fab 8 but through its research presence at SUNY Polytechnic Institute in Albany.

GlobalFoundries’ corporate predecessor, AMD, received $1.37 billion in state subsidies plus millions more in tax breaks and infrastructure upgrades for what was supposed to be a $4.2 billion facility employing 1,465 people. That equals about $1 million per promised job, a remarkable sum that officials said was justified for the factory’s expected impact on the region's economy and technology sector.

The company eventually more than doubled the workforce commitment for Fab 8 in Malta and more than tripled the investment commitment. Economic developers have said its impact on the region has been as great as hoped. GlobalFoundries is approved to build a second chip fab plant on site but has not indicated when or if it will do so.

As GlobalFoundries was hiring all those workers, it undertook a few rounds of job cuts, often without specifying exact numbers. The most recent came in June, when the company undertook a 5 percent workforce reduction worldwide.

The Malta foundry currently produces chips with 14-nanometer circuits, which as small as 14 billionths of a meter. GlobalFoundries had begun researching and development for next-generation 7-nanometer chips, with expensive investments in personnel and equipment, when it changed its strategy.

On Monday, it announced it would shelve 7-nanometer development indefinitely and focus on refining its 14-nanometer chips, with the resulting workforce reduction of less than 5 percent.

Vanags said he sees this as a temporary setback rather than a permanent sea change.

“I think they’re a strong company in terms of technology,” he said. “I think over time we’ll see these jobs come back.”

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