Arm Holdings plans to cut up to 15% of its workforce, about 1,000 jobs globally, less than two months after Nvidia’s $40 billion bid for the company collapsed. 

The Britain-based company intends to largely slash jobs in the United Kingdom and the U.S. It employs more than 6,500 people globally, including roughly 3,000 employees in its home country, according to The Guardian.

The chip designer faced insurmountable regulatory pushback to its deal with Nvidia. The failure to bring the two companies together resulted in a swift CEO change and its conglomerate owner SoftBank announced it would fall back on its backup plan to take the company public in the first quarter of 2023.

Nvidia coughed up a $1.25 billion breakup fee after abandoning the deal, but the cash infusion apparently wasn’t enough to delay massive job losses.

Of course, there’s no guarantee those jobs would have been secure under Nvidia’s ownership. 

Nonetheless, the move marks the first major step taken by its CEO Rene Haas, who was promoted to lead the company the same day the deal with Nvidia fell apart.  

“We need to be more disciplined about our costs and where we’re investing,” he wrote in an email shared with The Telegraph. “To stay competitive, we need to remove duplication of work now that we are one Arm; stop work that is no longer critical to our future success; and think about how we get work done.”

Analysts at GlobalData don’t buy that explanation. Or at least view it as a poor strategy. 

The workforce reduction “contradicts its ambitions to address the key themes of the next decade, including the metaverse, artificial intelligence, and IoT,” GlobalData analyst Lil Read wrote in a statement. 

“Building next-generation technology is a job for experienced staff and Arm will need to retain this talent if it wants to succeed in emerging themes like the metaverse. Experienced tech professionals who have built their careers at Arm may be worried about what the future holds for them, but these engineers will be hot commodities in the tech market, which is always looking for top talent,” Read wrote. 

The job cuts are also likely “a short-term fix for a long-term problem,” GlobalData principal analyst David Bicknell added. “These job cuts may buy Arm some time following the failed buyout but will not improve its cash flow position in an uncertain world.”