Hundreds of Arm China employees signed an open letter on the company’s website in support of now former branch director Allen Wu. The story of his dismissal lasted regarding two years and last Friday ended in victory head office Arm. However, the open rejection of this fact by many employees of the branch in China can make life difficult for both Arm China and Arm itself: disgruntled people are a bad prop for business.
Image source: semianalysis.substack.com
Let us briefly recall that at one time the owner of Arm – the Japanese company SoftBank – a controlling stake in Arm China was sold to Chinese investors. The branch was supposed to serve Chinese companies with licenses and even unique developments, and to speed up the processes, all this was put under local management.
Concern at Arm’s head office arose following Arm China’s CEO Allen Wu went arbitrarily. He himself began to determine to whom and under what conditions to transfer licenses and what developments should be carried out in the unit. What is important, there were no problems from the financial side. Branch regularly listed money to Arm owners and steadily increased revenue and profit.
An attempt to fire Mr. Wu two years ago came to nothing. Firstly, this was prevented by the lack of a controlling stake in the head office. Secondly, the rebellious director refused to hand over the seal and statutory documents, and also changed the security in the office to a loyal one. To add to the conflict, SoftBank tried to sell Arm to NVIDIA and, when this was prevented, decided to list the company on the stock exchange. Problems with the manageability of the Chinese office might significantly reduce the initial capitalization of Arm.
A week ago, Arm China’s board of directors was able to fire Allen Wu. The subsequent protest of the branch employees and the very opportunity to publicly declare this on the Arm China website showed that the new government does not control many things and, in particular, access to corporate resources. In addition, dissatisfied employees threaten to quit the division, and if they are offered a job under the wing of Mr. Wu in a new company, they may well go there with all the image and intellectual losses for Arm and the branch.
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