semiconductor manufacturer micrometer announced on Wednesday that it would reduce its workforce by about 10% through 2023, in the latest example of a tech industry slowdown affecting jobs.
Micron’s shares fell more than 1% in extended trading.
Based in Idaho, Micron employs approximately 48,000 people, according to a recent SEC filing. The company said it will meet its reduction target through voluntary exits and layoffs.
Micron also said it is suspending bonuses for 2023.
“On December 21, 2022, we announced a restructuring plan in response to difficult industry conditions,” the company said in an SEC filing. “As part of the restructuring plan, we expect to reduce our headcount by approximately 10% over the course of calendar year 2023 through a combination of voluntary redundancies and downsizing.”
Micron said it expects a $30 million charge in the current quarter related to the restructuring, which will also include reduced investments in manufacturing capacity and cost-cutting programs.
The move comes as Micron reported fiscal first quarter 2023 results in which it missed analyst estimates for earnings and revenue and forecast a larger loss per share than it had forecast for the current quarter.
Here’s how Micron compared to Refinitiv consensus estimates for the quarter ended December:
- loss per share: $0.04 adjusted vs $0.01 est
- revenues: $4.09 trillion versus an estimated $4.11 trillion
Micron said it expects a loss of 62 cents a share on revenue of $3.8 billion in the current quarter. Analysts had expected a loss of 30 cents per share on sales of 3.75 billion US dollars.
Micron is best known for supplying memory to computer makers, but it’s facing an environment where PC sales have already begun to slow or shrink, while server sales are expected to grow little in 2023.
Micron CEO Sanjay Mehrotra said in prepared remarks that there is too much memory supply and not enough demand, which has caused the company to hold more inventory and lose pricing power.
“In the last few months we have seen a dramatic drop in demand,” Mehrotra said, according to the prepared remarks.
He said he expects the company’s profitability to remain “in question” through the end of 2023, but that the company expects revenue and free cash flow to recover later in 2023. Micron said it has suspended share buybacks.
Micron’s restructuring comes after other semiconductor companies announced hiring freezes or layoffs. In October, intel announced it would lay off workers as part of a plan to cut spending by $10 billion. NVIDIA announced a hiring slowdown over the summer, and Qualcomm announced a hiring freeze in November.
But it’s not just semiconductor companies that are adjusting after two pandemic-driven years of growth and supply challenges. Tech companies including MetaTwitter, snapStripe duck Tesla have also cut staff as companies brace for a possible recession and higher interest rates.