(Yicai) Nov. 15 -- Imagination Technologies will let go 20 percent of its employees worldwide, including staff at its Chinese unit, due to global economic factors, sources at the UK chip design maker said.

The scale of Imagination’s layoffs in China will be consistent with those worldwide, the insiders told Yicai yesterday. Up to 84 percent of its workforce is involved in research and development, executives said at an event in Shanghai last week.

Imagination will shrink its staff count because of the challenging "business environment" over the last 18 months, according to a Reuters report on Nov. 13, citing an internal message. The cuts are company-wide and affect every subsidiary, it said, adding that the London-based firm had 559 employees at the end of last year.

Set up in 1985, Imagination creates and licenses market-leading processor solutions for graphics, computing, and vision and artificial intelligence processing, according to its website. It was bought by California-based Canyon Bridge Capital Partners in 2017, a private equity firm backed by Chinese state-owned investment holding company China Reform Holdings.

In 2020, Imagination inked a deal to supply Apple with chip technology. “Our partnership with Apple is still going on, and the US tech giant is still using our GPU technology,” said Liu Guojun, vice president and general manager of Imagination China.

As one of the world's major chip designers, Imagination competes with SoftBank Group's Arm Holdings, with intellectual property licensing and royalties the main source of revenue for both companies. Imagination's pre-tax profit was GBP17 million (USD21.2 million) last year on revenue of GBP120 (USD150 million).

Imagination has been exploring opportunities in the Chinese market in recent years, working with semiconductor companies to provide services for local firms to independently design chips and build a chip ecosystem, Liu pointed out.

“We hope to form a common ecology with end users and OEMs and will continue to make further investments in the Chinese market,” Liu added.

Editor: Martin Kadiev