Thread regarding GlobalFoundries layoffs

Clarification Needed by an Insider for an Outsider

Please do not interpret the following post as someone who is trying to bait or stoke the flames, I am truly confused at the current situation at GF and am in need of an explanation as to why these forums have become so cryptic in such a short few weeks in regards to our future. For background, I have worked at the Malta site for 5+ years in a relatively isolated department and the general attitude of the place has inexplicably changed dramatically in a relatively short period of time.

Firstly, the Malta site alone made over $2B in revenue and the company as a whole turned a profit of $600M in 2018. This was a banner year for GF and spirits were relatively high at the beginning of 2019 with the general feeling that we finally were able to compete in this industry and firmly established ourselves in the market. Even though we are not attempting to move forward in our technology nodes, we have proven success in 14nm. Furthermore, we were all under the impression that our jobs were safe because of how many new people they were bringing in coupled with our managers not showing any signs of distress regarding manpower.

I will say that starting sometime in July/mid-August that the reigns were a little tighter, but for some reason everyone's attitude had started to drop off dramatically. Many people (technicians and engineers) have stopped caring completely and management is allowing for not just a few people here and there, but nearly everyone to do the minimal amount of work necessary for the "meets expectations" rating (which is extremely easy to achieve). In our last roundtable meeting, our senior director told us they were no longer going to replace anyone that left moving forward and impose a hiring freeze (effective three days ago).

So I ask the industry veterans: we were extremely profitable last year, so why would we be unable to secure contracts? I believe the only surefire way we could go bankrupt is if we land ZERO contracts which would be beyond unlikely. Everything that is being said on these forums makes sense in theory (lawsuits, announced IPO, selling off business units), but financially there is plenty of reason to believe that management is simply lowering operating costs through manpower to offset our slowly declining revenue which is a far cry from closing our doors. What do you believe is really going on and what has changed so quickly to make people begin thinking that we truly are doomed this time around compared to the last several years with the same failed predictions? In other words, many people have predicted the world to end, but no one has ever been right.

by
| 2287 views | |
Post ID: @11qa9LZ2

14 replies (most recent on top)

Not the now but the future. 7nm was always expected to fail . Next ??

The "2018 now" is not as good as it looks.

14nm was licensed from Samsung for an absurd sum. EBIDTA type calculations allow you to remove such costs including depreciation from your finances although it clearly should be included. If TSMC / Samsung adopted such a model , their "EBIDTA profits" could be well over 100% maybe even 200%+

Any measure of success came because AMD was trapped in a contract ( expiring soon ) .

TC did a great job when he started out. He drained the swap .... Eliminated the sleazy executives / abusive behavior & crooked/unethical HR partners left.

Problem is the absurd merger with IBM brought in a new swamp with absurd Grade 9+ job grades to former IBMers... a former grade 5 fresh grad with GF who joined IBM before the merger got a nonsensical Grade 8. This poisoned the work environment which never really recovered.

by
|
Post ID: @11qa9LZ2-jful

I'm no industry veteran, being one of the hated NCGs brought on a few years ago, but my one cent is the lawsuit. I keep hearing that we're pivoting because potential customers wanted differentiated products, and weren't interested in 7nm. So.... we're suing those potential customers? I don't have an MBA, nor am I a McK consultant, but that doesn't seem to be a way to win customers. More like make sure they'll never do business with you. Something good did come out of the lawsuit though - I was about to buy a condo. The lawsuit announcement stopped me cold, and I started looking for other opportunities. I'd kinda ignored the other bad stuff - the sales, the EBITDA "profits" - because maybe they weren't really bad, but the lawsuit was the last straw. For mgmt. and Mubudala to be OK with that lawsuit it's like they're not planning on a future with Global so neither should I. The attitude in my group had been not really optimistic, but cautiously OK before the lawsuit like maybe things were getting better. Then it was like they popped a balloon and the attitudes plunged, so it wasn't just me who took it as seriously bad news.

by
|
Post ID: @11qa9LZ2-6unv

The attitude that GF is over has even spilled over into the community. My wife's friend works for the town and people are really scared GF is going belly up. My neighbor is a real estate agent and she's asked me if things are OK because prospective buyers of area homes have asked her if GF is going to close. They're worried about home prices if GF closes. I am in an office job and I am two semesters away from a degree where I can work anywhere. Come spring I will have my degree, so I am not worried, but lots of people outside GF are. I am also thinking the plunge is because the Prince tried to unload GF and it failed. People thought Samsung would buy the place, and it's apparent they won't. Then came the id–tic lawsuit, then the WTH IPO announcement, then TSMC's we will bury you countersuit. AMD is the only big customer, and they will not deal with GF again once the current wafer contract runs out. They have been bitten too many times to want anything to do with GF going forward. Good people are leaving and we're left with the bad or NCGs, and now there's a freeze, so we can't even try to acquire talent. There's no clear business strategy, just fiddling while the ship sinks because there's no way to stop it now. The tap of oil funds has run dry and I think GF'S next big announcement will be a big layoff. I think the naysayers have got it right this time - GF is nearing the end.

by
|
Post ID: @11qa9LZ2-5mgk

Whoever said Mubudala aka the petro dollars owner of GF is done nailed it. I think the royal family has had enough. They tried two things that failed. Pressure US and NY government for taxpayers money. Tried to get Samsung to buy it.

Both efforts failed. I think prince has had it. He's given message to SLT that the sugar is done. No more mubu bleeding. Go figure it out youself.

The fact that GF has never had to operate as normal biz has ruined it. When you know you have backstop to overcome your failures, you don't make proper decisions to become a profitable biz. Now that prince is done, everyone is sad with heads bowed and heading for exit.

by
|
Post ID: @11qa9LZ2-5gvy

@11qa9LZ2-3wcv if you were there late August 2017 and received that exit Atul email with the power point attachment, the individual is included.
Ask around. I left 2 months after. The Individual's LinkedIn shows they are still employed there.

by
|
Post ID: @11qa9LZ2-3isl

Any hint on the name of the superstar who rose to SVP rank in 5 yrs?

by
|
Post ID: @11qa9LZ2-3wcv

@11qa9LZ2-2yhv

You absolutely nailed it!!! Except that SVP is not grade 11, but grade 13. So this dude rose 7 grades in 5 years, coz he is TC's favorite! And there are many other cronies who have moved up because of their godfathers. All that extra hard work that some people are putting is not going to pay off. It's useless. There are many people who are no value add, entire groups or departments, and keep surviving, some even getting promoted. Just keep kissing up to the right execs. Another point to add to the mess is that communication is so terrible that people are learning about org changes thru linkedin. CEO after CEO has nicely fooled Mubadala, and you have to give credit to TC that he has been fooling them for 1.5 years.

by
|
Post ID: @11qa9LZ2-2fpa

For me, the change came with the apparent abandonment of GF by Mubadala. It seems as if they simply want GF gone from the porfolio. SLT seems to have that same "short timer" attitude. It's as if those high up the food chain realize that GF hasn't, and isn't going to replace the revenue stream from AMD, so everyone is just trying to pick the bones clean on the GF carcass. That's where the lawsuit comes in - that move reeked of patent trolling, and trying to make a buck anyway possible. Then the IPO advertisements showed up, in what I took to be a weak attempt at proving that GF isn't a washed-up patent troll. I've worked for places that have closed before, and Malta definitely has a case of short-timer syndrome. All the best people are jumping ship, and those that are left are simply riding it out for whatever reason. Few people seem to have the attitude that GF is going to be here for the long term. That crisis of confidence may itself contribute to the ultimate downfall of GF.

by
|
Post ID: @11qa9LZ2-2dvh

There is definitely appearance and ethnic discrimstion in HR TEAM. Reminds of flight attendants in the 80s when there was descrimination height to weight ratio.

"A company made from other companies sc-ap can never be whole" -
Heard that in the hallway

by
|
Post ID: @11qa9LZ2-2uhr

Per the poster's comment of "Politics. Nepotism. Discrimination...."

This seems to be quite rampant at GF where I would consider "nepotism" to be just not family but friends as well. There seems to be a lot of protection of less stellar performers by many managers. Of course, once their benefactor leaves (by choice or not), they have no ability to stand on their own 2 feet. The only other place you see this kind of behavior is in the state government (particularly states like NY, MA and NJ).

Discrimination is rampant at many levels. First and foremost, the place is seriously practicing age discrimination on a large scale in hiring, promotions and just general employee treatment. Look at the layoffs last year, many many over 40 were let go and it seems especially true for women engineers. Look at how many of the older female engineers were targeted in the layoffs compared to the general population (with the exception of managers.)

There's other funny business going on. Five years ago there was an engineer who had been desperately looking for a job for over a year and he got hired as a level 6. He is now a SVP reporting directly to Tom...how the h*** does that happen? In that time, most people haven't got a promotion and this guy has moved from level 6 to level 11 (I think that's what SVP is).

Then there's the one group of people that work from 7am to 6pm everyday while eating lunch at their desks and there's the other group that strolls in somewhere around 9 or 9:30am, take the full hour for lunch in the cafeteria and then are out the door before 5pm. Yet the rating system and the upper management treats them all equally.

There is no reward for putting extra work or even putting in a full day, just maybe you might have a little better chance on not being part of the next RIF. Though given what happened in the last 2 layoffs, it didn't seem that hard work, intelligence, and the ability to get the job done had anything to do with the decisions.

by
|
Post ID: @11qa9LZ2-2yhv

I got hit in the 7 nm purge but still live in the area and still work in semiconductor. Was GF really profitable in 2018 on a GAAP basis? Before I left, they were bragging they were cash-flow profitable which means the were ignoring the depreciation of the equipment which based upon my back of the envelope calculation was something like $250 million a quarter (~ $ 1 billion a year). EBIDTA is nice but that is not how a public company is judged, I asked TC this question once and he said the Mubadala wanted to show a loss for tax reasons which at the time was likely true but would not be true for an IPO. From an IPO standpoint, you have to show profitability on a GAAP basis or how you are going to get there. This is why most of us think the iPO is a smoke screen

by
|
Post ID: @11qa9LZ2-1pjm

AMD still needs 14nm even for their current generation of 7nm chips since the IO chip is still 14LPP and manufactured in Fab8 (this is public knowledge GF censors). So I would guess for the next 2-3 years there will be a steady supply needed but not at the volume or $$$ that full CPU/GPU wafers generated. What happens when Intel gets the current generation ramped and/or AMD moves to their next generation is anybody's guess but it is likely to mean a LOT less GF involved in AMDs future 2-3 years down the road. What's going to replace that – that's the question. Lots of small customers/orders or will there be another large 14/12 customer? Given the planning it takes to get these things moving, I am guessing that those "in the know" have a much clearer picture of GF in 2021 and beyond. I would also hypothesize that the IPO is just a marketing tool to either show customers that GF plans to be around for a while or to entice potential suitors to pick up GF before the belle heads to the ball.

by
|
Post ID: @11qa9LZ2-vcy

Agreed that numbers look good last year and this year. So why would GF be unable to secure contracts? And why is morale so low and people leaving? Here are my 2 cents:

  1. The single biggest customer will go away when wafer supply agreement expires. May be end of 2020. No new customers. Commodity manufacturing in US is doomed. Nobody interested in derivatives. Its all 14nm process and AMD. You can not forever go with this.
  1. Politics. Nepotism. Discrimination. Open favoritism for women. You can see how many women quickly rose and got top management posts just because they are women and were favored over men.
by
|
Post ID: @11qa9LZ2-qxf

For the record, I left around a couple of months ago. I was at Malta for many years and I was trying to see how things worked post-pivot. Lots of promises from SLT but no deliveries. It was just a gradual wearing down - exiting senior tech people either not being replaced or being replaced by NCGs. This left the remaining senior technologists to not only cover for the exits but also help train the new hires. Most of these NCGs have no clue and are more interested in texting, IGing, FBing, etc than paying attention in meetings or training sessions. After having answered the same question to one of our newbies for the 4th time in 2 days, I was about to grab their phone and chuck it down the stairwell.

The company is focused on cost-cutting in the short term with no long term plan. However, I don't think there is any chance of "closing the doors" in the next couple of years. The people who say that are either delusional or just exaggerating. From my long time in this industry, I can tell from the general attitude of management, HR, etc that there is likely to be a "resource action" sometime between Nov and Feb. They are probably going to try to roll it with the Avera handover to Marvell to hide some of the numbers.

So if you are SMTS (maybe MTS) or above and your management has been stuffing the lower ranks with NCGs, you have a target on your back. I would also expect a lot of middle management will be gone. So if you are a manager more than 1 level down from your director, you are likely to be considered for exciting opportunities outside GF. This will leave a bunch of incompetent directors and people looking at their phones more than their tool/data/station/etc, not really a winning long term plan.

So that's my 2 cents, others will likely have different views

by
|
Post ID: @11qa9LZ2-wky

Post a reply

: