Imagination Technologies, a leading chip technology design company, is set to reduce its workforce by 20%, according to insiders familiar with the situation.
The United Kingdom-based firm, which entered into a chip technology supply agreement with Apple in 2020, cited the challenging business environment of the past 18 months as the primary reason for the staff reduction, as revealed in an internal message reviewed by Reuters.
These job cuts will be felt across the entire organization, affecting all units and departments, as confirmed by one of the sources.
Imagination Technologies released a brief statement, mentioning that the company is taking necessary measures to adapt to the ever-evolving and challenging market conditions but declined to provide further details.
Imagination Technologies is renowned for its chip technology, which competes with Arm Holdings, a recent entrant in the public market.
According to a recent filing with U.K. regulators, the company had a total of 559 employees at the end of 2022. It is estimated that up to 130 jobs in the U.K. may be at risk due to these layoffs.
Imagination Technologies is owned by the private equity firm Canyon Bridge, which receives backing from the Chinese state-owned entity, China Reform Holdings.
Canyon Bridge acquired Imagination in 2017, shortly after Apple announced its intention to develop its graphics technology, causing Imagination’s shares to plummet by 70%.
Apple has not yet responded to requests for comment regarding this development.
In its latest financial filings, Imagination Technologies reported a profit before tax of £17 million ($20.9 million) for the past year, with revenue amounting to £120.3 million.
The decision to reduce its workforce highlights the company’s commitment to navigating the turbulent market conditions and ensuring its long-term sustainability in the competitive chip technology industry.