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You always see 10-15% cuts leading up to an IPO. Investors love it for some reason. It wouldn't surprise me if they intentionally overhired in anticipation of
by swamp40 5y ago
You always see 10-15% cuts leading up to an IPO. Investors love it for some reason. It wouldn't surprise me if they intentionally overhired in anticipation of this. It's mostly not the technical talent.
- belval 5y ago> Investors love it for some reason. "Some reason" is a reduction of operating expenses which boost profit margins. From an investor perspective it makes sense, ARM is an established brand that has limited headroom to grow, you can't expect hyper growth from them so they need to make a case that the ROI is worth it, especially now that a buyout is off the table.
- marcosdumay 5y ago> "Some reason" is a reduction of operating expenses which boost profit margins. Well, that "profit" comes at the expensive of some difficult to measure forms of capital. It is very likely a net-negative for the company, but it does look good on the books.
- avrionov 5y agoI don't think that we always see 10-15% cuts before IPOs. Most companies continue to hire after successful IPO.
- drexlspivey 5y agoThey overhired because it was part of the deal to sell to softbank > As part of SoftBank’s deal to acquire Arm for £24bn in 2016, the UK Takeover Panel stipulated that it would have to double its UK headcount over a five-year period, which stood at 1,600 at the time. The requirement to do so expired last year.
- ksec 5y agoReally wish this was the top comment, It would save at least 90% of the comments in this thread.
- trustfundbaby 5y ago> You always see 10-15% cuts leading up to an IPO No you don't
- blaser-waffle 5y agoMakes EBITDA look good, which investors want to see. Also means any buyer has to cut less when the show up. Let the old mgmt take the blame for layoffs and culture changes, rebuild from scratch.