Micron announces 10% layoff, freezes bonuses

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A half-breed maker Micron announced on Wednesday that it would cut its headcount by around 10% in 2023, in the latest example of a slowdown in the technology industry affecting employment.

Shares of Micron fell more than 1% in extended trading.

Idaho-based Micron has about 48,000 employees, according to a recent SEC filing. The company said it would reach its reduction target through voluntary departures as well as layoffs.

Micron also said it is suspending the 2023 bonuses.

“On December 21, 2022, we announced a restructuring plan in response to challenging industry conditions,” the company said in an SEC filing. “Under the restructuring plan, we plan to reduce our headcount by approximately 10% over calendar year 2023, through a combination of voluntary layoffs and staff reductions.”

Micron said it expected a $30 million charge in the current quarter related to the restructuring, which will also include less investment in manufacturing capacity and cost-cutting programs.

The move comes as Micron reported first-quarter fiscal 2023 results that missed analyst estimates for earnings and revenue, and forecast a bigger-than-expected loss per share for the quarter. this.

Here’s how Micron fared against Refinitiv’s consensus estimates for the quarter ended in December:

  • Loss of all shares$0.04, adjusted, versus $0.01 estimated
  • Income: $4.09 billion versus an estimated $4.11 billion

Micron said it expected a loss of 62 cents per share on revenue of $3.8 billion this quarter. Analysts had expected guidance for a loss of 30 cents per share on $3.75 billion in sales.

Micron is best known for supplying memory to computer makers, but it is facing an environment where PC sales have already begun to slow or decline, and sales are expected to show no servers but little growth in 2023.

Micron CEO Sanjay Mehrotra said in prepared remarks that there is too much memory supply and not enough demand, which has resulted in the company holding more inventory and losing pricing power.

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“In the last several months, we have seen a significant drop in demand,” Mehrotra said, according to prepared remarks.

He said he expects the company’s profitability to remain “challenged” through the end of 2023 but that the company expects revenue and free cash flow to rebound later in 2023 Micron said it has suspended share repurchases.

Micron’s restructuring comes after other semiconductor companies announced hiring freezes or layoffs. In October, Intel announced that it would lay off workers as part of a plan to cut $10 billion in spending. Nvidia they announced a hiring slowdown over the summer, and Qualcomm announced their hiring freeze in November.

But it’s not just semiconductor companies that are changing after two years of pandemic-fueled growth and supply issues. Tech companies including MetaTwitter, SnapStruggle and Tesla have also cut workers as companies brace for a recession and higher interest rates.

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