US Chip Firm Marvell Cuts R&D Staff in Shanghai and Chengdu

American chip designer Marvell is cutting some R&D roles for its operations in China. In a written response to questions sent by Reuters, Stacey Keegan, the firm’s Vice President of Corporate Marketing, said, “In China, we will focus our R&D investments on local customers and the China market. As a part of this realignment, several of our business units and functions are announcing changes to their global location strategy that will result in the elimination of roles in China.” The firm did not specify how many employees would be affected by the cuts.

On the evening of October 27, STAR Market Daily learned from people familiar with the matter that the R&D teams abolished by Marvell are in Shanghai and Chengdu. According to an exposed list of departments affected by the decision, the SPG, PHY departments of Marvell Shanghai, the design verification team of the ASIC department, the engineering team of IT department, infrastructure team and GREWS department will also be reduced. In addition, the SPG and GREWS department of Marvell Chengdu will be abolished.

Some sources told Chinese media outlet iJiwei that Marvell’s layoffs in China involve all departments, and that the laid-off employees will have a two-month buffer period with a compensation method of N+3 (standard severance compensation plus three times the employee’s monthly salary). However, two departments are expected to complete the handover within this week, namely the chip verification team of the switch department in Shanghai and the post-silicon verification team of storage department. There are also reports that Marvell’s layoff-affected personnel can choose to work at Singapore subsidiaries, or they can choose the severance compensation.

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Founded in 1995 and headquartered in Silicon Valley, Marvell is a global leading semiconductor company providing a complete set of broadband communication and storage solutions, with R&D centers in Shanghai, Nanjing, Chengdu and Beijing in China. It has nearly 1,000 employees in the country, among which the International R&D Center in Shanghai once had more than 800 R&D personnel, which is the third largest R&D center after its headquarters in the US and center in Israel. Marvell had previously planned to expand the Shanghai R&D center to several thousand people, making it the largest R&D center in the world.

If the news of layoffs is true, Marvell will be the third overseas chip firm to lay off employees in China after Micron Technology and Texas Instruments. Besides, Seagate released its financial report recently, when it also said that the board of directors of the company had approved the implementation of a restructuring plan proposed in October last year to reduce costs. The plan includes about 3,000 job cuts, or about 8% of the global workforce, as well as other cost-saving measures. Seagate expects the plan to be completed in the second quarter of fiscal year 2023, and from the third quarter, the annual operating rate will be lowered by $110 million.

The layoffs have affected all US technology companies, such as Oracle, Philips, Intel, Microsoft, and others, while Meta has downsized through its “30-day list.” Google cut off half of the employees of its Area 120 projects, the R&D and innovation incubator department, leaving only seven from the original 14 projects.