GlobalFoundries announced to global employees on Monday that it will conduct global layoffs to reduce costs and increase competitiveness with competitors, especially Taiwan Semiconductor Manufacturing Co. (TSMC).

It is understood that GlobalFoundries employs 18,000 people in 14 locations around the world, including 10 chip foundries. This layoff accounts for approximately 5% - 10% of GlobalFoundries' total number of employees worldwide. Although the company will not specify how many people in each location will lose their jobs, it seems that the company’s core team at Fab 8 in Saratoga County may not be affected by layoffs. It is understood that Fab 8 has a total of dozens of teams, among which an 80-person R&D team is currently developing 7-nanometer chips, and such a core team is basically not within the scope of layoffs.

"In the coming weeks, we will be initiating a targeted workforce reduction specifically designed to improve our global cost structure and minimize redundancies that have accrued from previous mergers and acquisitions," GlobalFoundries spokesman Steve Grasso said in a statement released after the cuts were announced internally. "This limited action will impact approximately five percent of our global headcount, with a significant portion expected to come from a voluntary separation program. The program is part of a companywide initiative to improve the competitiveness of our cost structure relative to industry peers."

GlobalFoundries is a so-called " foundry" that produces chips for companies that do not own factories or require additional manufacturing capabilities. Although GlobalFoundries was the world's second-largest foundry maker in 2017 and its revenue was US$6 billion, TSMC, the world’s No.1, had 5 times the revenue of GlobalFoundries and accounted for more than 50% of the market share in the global market.

According to reports, GlobalFoundries will expand Fab 8 and recruit new employees in the later period. Recruiting employees after layoffs means that GlobalFoundries' move will not only reduce operating costs, but also adjust the structure and direction of the company, production, and R&D. The direction of these changes is toward the TSMC for sure.

Steve Grasso said: “Reducing the workforce is challenging for any organization. We will not take this action easily. We believe that these changes will enable us to lay a solid foundation for sustainable development. And continue to invest in the future."

In the next decade, the market's demand for new and more complex chips is expected to soar. It seems that after Caulfield, who was just appointed CEO of the company in the first half of the year, led Fab 8 and turned it into a huge success story in the industry, he tried to make GlobalFoundries get more growth than TSMC.