[E]mployees at GlobalFoundries in Essex Junction are bracing for another round of layoffs this week.
The semiconductor manufacturer, which makes chips for cellphones and other electronic devices, acquired the site from IBM in 2015.
GlobalFoundries announced plans last week to begin a worldwide workforce reduction of 5 percent, with the goal of minimizing redundancies from prior mergers.
Spokesperson Steve Grasso declined to specify the impact of layoffs at the Essex site. The plant currently has about 2,500 employees. A 5 percent cut means 125 workers could lose their jobs.
In a statement, GlobalFoundries wrote that the move is part of an initiative to remain competitive in the industry.
“A workforce reduction is challenging for any organization and we do not take this action lightly,” officials said. “We are confident that these changes will position us to build a solid foundation for sustainable growth and continue investing for the future.”
The company’s last round of cuts came when it let go about a dozen employees in May 2017 following a buyout program, part of a gradual downsizing of thousands of jobs at the Essex Junction plant over the past two decades.
GlobalFoundries is based in Santa Clara, California, but owned by the investment firm Mubadala — which in turn is owned by the government of Abu Dhabi, in the United Arab Emirates.
The company has manufacturing facilities in Singapore, in Dresden, Germany, and in Malta and East Fishkill, New York.
Frank Cioffi is president of the Greater Burlington Industrial Corp., an organization that focuses of economic and workforce development in Vermont. He said it is common for multinational corporations to reduce local workforces or retract spending across several sites, regardless of specific performance.
“I think GlobalFoundries is doing really well here,” Cioffi said. “If they have layoffs, they might be hiring in other areas.”
Essex Selectboard Chair Max Levy said GlobalFoundries is an important employer for the local economy. Each position at the plant has a multiplier effect of about two to three additional jobs in restaurants, retail operations and grocery stores that serve employees.
“The layoffs definitely have an impact, particularly for those who are let go, but the economy in Essex can probably absorb that loss,” he said.
Cioffi said laid-off employees should be optimistic, with low unemployment rates, about their opportunities in the Vermont job market.
“We never like to see anybody get laid off or lose their job, but the labor market is doing well here,” he said. “If you want to work and have decent skills, you are going to be able to find a position, there are thousands of jobs.”
Vermont’s Worker Adjustment and Retraining Notification Act, also known as WARN, requires businesses to submit a notice to the commissioner of the Department of Labor and the secretary of Agency of Commerce and Community Development 45 days prior to the date of final separation with an employee in the event of a mass layoff. The employer must also give 30 days notice to employees, the local chief elected official and the union, if one exists.
Michael Harrington, the Vermont Department of Labor’s deputy commissioner, said the state has not received a formal notice from GlobalFoundries, but has been in discussions with company executives.
The department has a rapid response team which travels to sites to present the services available to laid-off employees, including job skills training and assistance in submitting a claim for unemployment insurance benefits.
Harrington said his department’s relationship with GlobalFoundries goes back many years.
“We’ve helped them ramp up production and assistance for the demand of the work that they’re doing, and we’ve also been talking with them, whether or not this comes to be a potential layoff situation,” he said.
The state does not know the details of any reductions or plans for the facility.
“We have talked with them, and we have told them that we’re here to support them in whatever they need,” Harrington said.
The latest round of cuts is nothing new for Essex residents. Levy, who was laid off in 2014 after 26 years with IBM, said he can speak firsthand about the impact on individuals and their families. He started a business after he lost his position.
Levy estimates the facility had approximately 8,000 employees in 2000, in comparison with 2,500 today.
Cioffi attributes a large part of that shift to the nature of the business.
“The industry has totally changed where you can do a lot more production with a lot less bodies, using technology and machinery,” he said.
In addition to GlobalFoundries personnel, the complex still has around 400 IBM employees, some who work as part of a partnership between the two companies.
Levy said the selectboard works with the GlobalFoundries executive team to help support the company.
“Global is under global pressures,” he said. “The companies need to do what they have to do to be competitive, and if this allows Global to remain competitive it could put them in a better place to remain in Essex.”
