In a recent move reflecting the downturn in the semiconductor industry, Arm Holdings Plc (NASDAQ:ARM) has parted ways with more than 70 software engineers in China.

Around 15 of the laid-off staff are expected to be offered alternative roles related to projects within China. The terminated positions largely belonged to contract software engineers involved in various projects across Arm’s global operations.

Arm defended its decision to restructure its China software engineering resources, stating it was a bid to provide direct support to local developers.

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With global growth surpassing that of China, the country’s share in Arm’s global sales has dipped from 25% to approximately 20%, as revealed by CFO Jason Child in November. The firm, backed by SoftBank Group Corp. (OTC:SFTBY), has also been impacted by U.S. restrictions on technology exports to Chinese companies.

Arm is currently dealing with ongoing disputes with the ex-head of Arm China, adding to the company’s existing challenges. Earlier this year, Arm China, Arm’s sales office in the world’s largest semiconductor market, had to let go of over 100 employees.

With the downturn in the industry and the decline in China’s contribution to Arm’s global sales, the company has had to adjust its workforce to maintain competitiveness. Furthermore, U.S.-imposed technology export restrictions on Chinese firms add another layer of complexity to Arm’s operational environment.

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