The impact of federal job cuts on the electronics sector have begun to sink in as President Trump’s second term enters its second 100 days.
National Institutes of Standards and Technology (NIST) was originally scheduled to lose more than 500 jobs early in the current Trump administration, raising concerns for the functioning of the CHIPS program office as well as an array of research and standards operations. A big concern arose recently for cybersecurity and standards affecting cybersecurity and AI.
About a dozen top cybersecurity officials at NIST are leaving, according to report by Cybersecurity Dive that relied on two unnamed sources. NIST has not commented.
According to the report, departures include Matthew Scholl, chief of NIST’s Computer Security Division; Tim Hall, head of CSD’s Security Testing, Validation and Measurements Group; and David Ferraiolo, head of CSD’s Secure Systems and Applications Group.
The article quoted a former NIST official saying, “To lose this many all at the same time is going to be a massive hit. The staff was already overworked and did not have the resources to do all that they’ve been tasked to do in EOs and by Congress in law.”
Meanwhile, a PhD remaining at NIST in CSD said he hopes to stay on a few more years before retirement, deciding to not take an early retirement offer from officials. He told Fierce Electronics that he predicts the group and others at NIST “will just do less” than before when counting up accumulated job cuts. He spoke on condition his name not be used.
“Somebody is going to write standards, and if not NIST, then who? China? I find it hard to believe that American manufacturers want to wake up one day trying to build cars based on Chinese standards and regulations while the cars are meant for American consumers,” the NIST employee told Fierce. “If NIST were to be cut so severely or vanish, yes, industry and humanity will suffer because these super high tech, just around the corner, technologies must have standards.”
Jack Gold, an analyst at J. Gold Associates, said that NIST professional’s concerns are not an overreaction.
“NIST is a critical component of our nation’s cybersecurity and they programs they sponsor are critical to keep our infrastructure safe,” Gold told Fierce. “NIST already had more o nits plate than it could handle, so having a significant reduction in personnel, especially high-level personnel with years of expertise, is alarming. In the long run it will make it harder for any institutional support that covers virtually ever industry and even consumer protections.”
CHIPS Act grants under review by Commerce Secretary Lutnick
NIST also oversees the US CHIPS Act grant awards and dispersal of grants, and began seeing layoffs under the Trump administration in February. The CHIPS program and US Treasury had dispersed about $4 billion of $39 billion for grants when Trump took his second term after reaching agreements with various manufacturers to provide about $36 billion in grants contracts. President Trump has urged Congress to use unspent funds to help retire the nation’s debts, but Commerce Secretary Howard Lutnick has begun a process of reviewing the dozens of grants contracts signed during the Biden administration.
One industry veteran who left the CHIPS Program office before Trump took office said he did not worry about grants recipients losing out on previously-approved agreements, noting they have legally binding agreements and could sue if the government fails to hold up its end. “Very few companies would sue, and most companies will find ways to address the administration’s issues,” the official told Fierce, asking not to be named.
“Whatever Lutnick’s team finds, companies will find ways to address the concerns and not settle for less. Maybe even some money will be left on the table that can be used for companies that could not be supported earlier.” The official noted that the $4 billion was the early dispersal of grants in multi-year agreements, meaning that many more billions are still legally required to be dispersed in coming years as long as manufacturers meet their requirements to build new facilities or upgrade older ones.
He suggested Lutnick’s team might negotiate to reduce a grant of 15% of a total project cost down to 10%. “ Those companies might say the next time around I’ll think twice about the US going back on their deal,” he said. The bigger benefit to companies building new facilities may well turn out to be the 25% tax exemption on the cost of new projects. Some companies have received CHIPS Act grants funds and noted so in company earnings, including Intel which recently said it has received $1 billion. Intel has been awarded a total of more than $8 billion for fabs.
The official said he left along with others who have not been career government workers and had been in the CHIPS program office because of their expertise in semiconductor hardware fields. “Many were consumed by the passion for the work. I owed a debt after I came to this country and it has treated me well.”