BURLINGTON, Vt. (WCAX) More layoffs are coming to GlobalFoundries in Essex Junction. An internal email Wednesday from the CEO Tom Caulfield announced 5 percent of employees in the entire company will be let go.
A company source tells WCAX News about 130 employees will lose their jobs in Essex Junction next week.
GlobalFoundries says cuts now will build a foundation for future operations. The international corporation has been in the news many times in connection with layoffs.
We asked business and economic experts why companies make cuts like this.
"Companies do this all the time," said Art Woolf, an economics professor at the University of Vermont. "Sometimes they do it when they're having problems, sometimes they do it when they're OK but they just want to get as lean as they can."
Woolf was responding to GlobalFoundries announcing the global workforce cuts. The Essex Junction plant churns out chips for cellphones and gaming systems.
"It doesn't necessarily mean the Vermont entity is not doing well," Woolf said.
Frank Cioffi of the Greater Burlington Industrial Corporation focuses on workforce development in Vermont. He says the semiconductor company could be dealing with unanticipated costs or a change in customer needs. But he believes it doesn't mean they'll stop hiring.
"They'll still be hiring because they'll retract in a certain area of the business but they might be still looking for new employees in a different aspect of what the company produces," Cioffi said.
Cioffi says he's concerned about workers being laid off. A company source tells WCAX News there are about 2,600 employees that work at GlobalFoundries in Vermont and about 130 will lose their jobs starting next Tuesday.
"Good people that have skills, that want to work, can find work, there's a lot of work," Cioffi said.
In a full employment economy, like in Vermont, our experts say almost every industry is looking for employees.
"It's never good to get laid off but if you have to get laid off, it's better to do it when the economy is doing well," Woolf said.
A company source tells us one of the reasons for these cuts is to minimize redundancies and overlap that still remain from the IBM acquisition.
IBM paid GlobalFoundries $1.5 billion to take its chipmaking division off its hands in 2015. When that happened, about 4,000 people worked at the Essex Junction facility.