Semiconductor maker Micron pronounces 10% workers discount, suspends bonuses

Semiconductor maker Micron introduced Wednesday that it could scale back its headcount by about 10% in 2023, within the newest instance of a expertise trade slowdown affecting employment.

Shares of Micron fell greater than 1% in prolonged buying and selling.

Idaho-based Micron has about 48,000 workers, in keeping with a current SEC submitting. The corporate mentioned it could hit its discount goal by means of voluntary departures in addition to layoffs.

Micron additionally mentioned it’s suspending 2023 bonuses.

“On December 21, 2022, we introduced a restructure plan in response to difficult trade circumstances,” the corporate mentioned in an SEC submitting. “Underneath the restructure plan, we anticipate to cut back our headcount by roughly 10% over calendar yr 2023, by means of a mix of voluntary attrition and personnel reductions.”

Micron mentioned it anticipated a $30 million cost within the present quarter associated to the restructuring, which may also embody much less funding into manufacturing capability and cost-cutting packages.

The transfer comes as Micron reported fiscal first-quarter 2023 outcomes the place it missed analyst estimates for earnings and income, and forecast a bigger loss per share than anticipated within the present quarter.

This is how Micron did versus Refinitiv consensus estimates for the quarter ending in December:

• Loss per share: $0.04, adjusted, versus $0.01 estimated
• Revenues: $4.09 billion versus $4.11 billion estimated

Micron mentioned it anticipated a lack of 62 cents per share on income of $3.8 billion within the present quarter. Analysts had anticipated steering of a lack of 30 cents per share on $3.75 billion in gross sales.

Micron is finest identified for supplying reminiscence to pc makers, however it’s going through an atmosphere the place PC gross sales have already began to gradual or shrink, whereas server gross sales are anticipated to point out little development in 2023.

Micron CEO Sanjay Mehrotra mentioned in ready remarks that there’s an excessive amount of reminiscence provide and never sufficient demand, which has resulted within the firm maintaining extra stock and shedding pricing energy.

“Within the final a number of months, we have now seen a dramatic drop in demand,” Mehrotra mentioned, in keeping with the ready remarks.

He mentioned he expects the corporate’s profitability to “stay challenged” by means of the tip of 2023 however that the agency expects income and free money move to get better later in 2023. Micron mentioned it has suspended share repurchases.

Micron’s restructuring comes after different semiconductor firms have introduced hiring freezes or layoffs. In October, Intel introduced that it could lay off staff as a part of a plan to chop $10 billion in spending. Nvidia introduced a hiring slowdown over the summer season, and Qualcomm introduced its hiring freeze in November.

Nevertheless it’s not simply semiconductor firms adjusting after two pandemic-fueled years of development and provide points. Tech firms together with Meta, Twitter, Snap, Stripe and Tesla have additionally reduce workers as firms gird for a possible recession and better rates of interest.