Updated at 5:27 p.m.
GlobalFoundries, the multinational company that owns a giant semiconductor plant in Essex Junction, sent a memo last week to employees around the world warning that it intends to reduce its workforce.
VTDigger has not seen the memo, but GlobalFoundries spokesperson Gina DeRossi confirmed its contents.
“Based on the current microeconomic 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,” DeRossi said in an email to VTDigger.
DeRossi cited “rapidly developing uncertainties in the global economy,” including inflation, elevated energy costs and rapid interest rate increases. She said the company would not disclose any additional details at this time.
It is not clear if any of the more than 2,000 employees who work at the Essex Junction plant would be affected.
The company is the largest private employer in Vermont, according to the Essex Junction plant’s general manager, Ken McAvey. It also has factories in New York, Germany and Singapore.
GlobalFoundries recently secured $30 million in federal funding to accelerate development in Essex Junction of semiconductors that would allow devices to connect more quickly to the internet and power electric vehicles. The company announced the funding at a joint press conference with U.S. Sen. Patrick Leahy, D-Vt., who had helped obtain the funding.
David Carle, Leahy’s spokesperson, said the senator is “concerned about any workforce reduction news.”
“These frustrating economic times have meant global demand issues everywhere, including in Vermont. But it is still difficult news to hear, especially with the holidays coming up,” Carle said. “He will continue to do what he can to support workers in Vermont to ensure that they have opportunities to continue to earn paychecks to feed their families.”
Last week, before warning employees of job cuts, GlobalFoundries announced that it would cut costs by $100 million next year and another $100 million after that in anticipation of a global decline in demand for semiconductors as the world economy slows down.
One of the analysts on last week’s call with GlobalFoundries executives said the news was not entirely unexpected.
“When they were talking about expense reductions on their last earnings call, that’s kind of where you end up,” said Matthew Bryson, senior vice president for research at Wedbush Securities.
Bryson said the layoffs present some risk to the company because several semiconductor factories are due to be built over the next 10 years.
“You’re going to be fighting for talent,” Bryson said. “All those factories need staff. There’s a limited amount of talent in terms of people in semiconductors. It might be proved to be short-sighted depending on how it works out.”
The Vermont Public Utility Commission recently granted GlobalFoundries permission to set up its own electric utility that would sell power directly to the Essex Junction plant as the company seeks to cut energy costs.
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Correction: An earlier version of this story misspelled Gina DeRossi’s surname in one instance.