GlobalFoundries lays off nearly 150 Vermont workers, citing economic headwinds
GlobalFoundries will lay off 148 employees in Vermont, according to a notice filed with the statethis week. The $32 billion semiconductor company is Vermont’s largest private, for-profit employer, with about 2,000 workers at its plant in Essex Junction. The layoffs amount to about 7% of the company’s Vermont workforce.
According to state records, this is the first mass layoff event at GlobalFoundries’ Vermont plant since June 2018, when the company cut 116 positions.
"As we look to 2023, the entire semiconductor industry is facing softer demand as the overall economy slows, and although we cannot predict the depth and duration of these pressures, like others in our industry and across the technology sector, we initiated a hiring freeze and are selectively reducing our global workforce,” said GlobalFoundries spokesperson Gina DeRossi in a written statement to Vermont Public.
DeRossi noted that more of the job cuts are in “non-manufacturing” positions than in manufacturing jobs, and said laid off employees “are being provided with support to help with their transition.”
The layoffs will take effect on March 17, 2023, according to the company’s filing to the state. That will give impacted employees time to look for new work, and for now, there are plenty of options, as Gov. Phil Scott noted at a press conference Tuesday. Scott said he heard from several companies shortly after news of the GlobalFoundries layoffs broke.
“Saying, ‘Can you give us a list of who they are, and maybe a resume or just give me a name and contact information, because we could use their help right now,’ ” Scott said.
Commissioner of Labor Michael Harrington estimated that there are about 23,000 open jobs in Vermont. But given the Federal Reserve’s efforts this year to reign in high inflation by raising interest rates, Harrington said other Vermont companies could potentially follow suit with layoffs in the coming months.
“I do think there's going to be some movement in businesses, depending on how much they rely on the global economy,” Harrington said. “But I also would highlight that that's not necessarily surprising, or indicative of something greater.”
Harrington noted that, as is typical in mass layoff events, his department will work with impacted GlobalFoundries employees to help navigate the state’s unemployment system or assist in finding new work.
“I do think there's going to be some movement in businesses, depending on how much they rely on the global economy. But I also would highlight that that's not necessarily surprising, or indicative of something greater.”Michael Harrington, Vermont Commissioner of Labor
GlobalFoundries first signaled that layoffs were on the way in a call with investors in November, as the company predicted a slowdown in demand for semiconductors, despite raking in $2 billion in revenue in the third quarter of this year. On that same call, company leaders said they specifically planned to cut back production of chips made on 200 millimeter wafers, which it makes in Essex Junction and Singapore.
On Dec. 1, the company said that the cuts would eliminate about 5% of its global workforce. But it was unclear until this week how many of those layoffs would be in Vermont.
The layoffs come despite an influx of support for the industry from both the federal and state government. In October, outgoing Sen. Patrick Leahy announced a $30 million award to fund equipment upgrades at the facility. Days later, Vermont’s Public Utility Commission gave the company the go-ahead to create its own electric utility at the site, a move the company has said will significantly lower its power costs. The PUC’s approval ended an 18-month-long process, during which environmental advocacy groups successfully pushed back against GlobalFoundries’ attempt to exempt its prospective utility from Vermont’s renewable energy requirements.
In a statement, Sen. Leahy said he’s concerned to hear about the layoffs, but “will continue to do what I can in my final days as Vermont’s U.S. Senator to support all Vermonters, including those experiencing job loss.”
Meanwhile, the Biden administration is preparing to award billions of dollars to companies like GlobalFoundries that manufacture semiconductors in the United States. Congress approved that funding in the so-called CHIPS Act last August. The Commerce Department plans to release guidelines for companies to apply for the money in February.
“That can only be really good for us,” said Frank Cioffi of the Greater Burlington Industrial Corporation, referring to the CHIPS Act funding. “We’ve got a heck of an asset here in Vermont.”