Semiconductor designer Micron is declaring staff decline and is suspending rewards

December 23, 2022: On Wednesday, Semiconductor creator Micron declared that it would reduce its headcount by 10% in 2023, in the recent example of a technology industry slowdown which affects employment. Shares of Micron decreased by over  1% in extended trading.

Idaho-based Micron has 48,000 employees, according to a recent SEC filing. The firm would hit its reduction target through voluntary departures and layoffs. Micron stated that it is suspending 2023 bonuses.

“On December 21, 2022, we stated a restructure plan as an answer to contesting industry conditions,” the firm said in an SEC filing. “Under the restructure plan, we hope to reduce our headcount by nearly 10% over the calendar year 2023 through voluntary attrition and personnel reductions.”

Micron anticipated a $30 million charge in the current quarter related to the restructuring, including less investment into manufacturing capacity and cost-cutting programs.

The move comes as Micron stated financial first-quarter 2023 results, where it missed analyst estimates for returns and revenue and forecasted a more significant loss per share than anticipated in the current quarter.

Micron added that it expected a loss of 62 cents for every share of revenue of $3.8 billion in the recent quarter. Analysts had anticipated guidance of a loss of 30 cents for every share of $3.75 billion in sales.

Micron is well known for supplying memory to computer makers, but it faces an environment where PC sales have nearly started to slow or shrink while server sales are anticipated to show slight growth in 2023.

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

He said he expects the firm’s profitability to “remain challenged” through 2023 but that the company anticipates revenue and free cash flow to recover later in 2023. Micron said it had suspended share repurchases.

Micron that makes arrives after other semiconductor companies have announced which hires freezes or layoffs. Intel announced that it would lay off employees as part of a plan to cut $10 billion in spending. Nvidia stated there was a hiring slowdown over the summer, and Qualcomm said it is a hiring freeze in November.