Micron will cut its workforce by 10% next year and take other cost-cutting measures as the computer memory chip maker struggles to deal with oversupply amid a slump in demand.
Micron will cut its workforce by 10% next year and take other cost-cutting measures as the computer memory chip maker struggles to deal with oversupply amid a slump in demand.
Micron CEO Sanjay Mehrotra announced the restructuring during a quarterly conference call with investors on Wednesday, noting that prices for computer memory products had "declined significantly" in recent months, Boise television station KTVB reported. Told.
According to a filing with the Securities and Exchange Commission, the company will cut staff by approximately 10% during 2023 through voluntary departures and layoffs. The company said employee bonuses would also be suspended next year and executive pay would be reduced for the rest of the 2023 fiscal year, which runs through August.
The Boise, Idaho-based company has approximately 48,000 employees in 38 states across North America, Europe and Asia – including more than 5,000 in Boise. It has not been announced where the layoffs will take place.
In September, Micron announced it was investing $15 billion by the end of the decade on a new semiconductor plant in Boise, which is expected to create 17,000 American jobs. The following month, the company announced that another semiconductor plant would be built in upstate New York, promising long-term investments of up to $100 billion and a plant that could bring 50,000 jobs to the state. Those plans are not expected to be affected by the restructuring.
At the time, Mehrotra said the investment was made possible by the federal Chips and Science Act of 2022, a $280 billion bill aimed at boosting American competitiveness against China. The law set aside $52 billion to bolster the semiconductor industry, which has been struggling to make the memory chips that power smartphones, cars and computers because of supply chain issues related to COVID.
But the company has seen a dramatic decline in demand in recent months. Mehrotra said unit volumes for personal computers and smartphones are expected to decline in 2022. The company primarily manufactures two types of chips: NAND, which saves data when power is removed, such as in portable flash drives, and DRAM, which must be turned on to hold data.
"The industry is facing the most severe imbalance between supply and demand in both DRAM and NAND in the last 13 years," he added. ,
The restructuring plan was part of Micron's announcement of financial results for the first quarter of the company's fiscal year, which ended on December 1. Revenue for the quarter came in at just under $4.1 billion, up from $6.6 billion the previous quarter.
Still, Mehrotra said demand is expected to grow by about 10% for DRAM and about 20% for NAND next year.
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