BOISE, Idaho — Boise-based Micron Technology said it would cut its workforce by 10% next year while reporting a decline in earnings – swinging to a loss in the latest quarter.
The technology giant has roughly 48,000 employees around the world, according to its latest SEC filing. The job cuts would come through both voluntary employee departures, as well as layoffs.
“On December 21, 2022, we announced a restructure plan in response to challenging industry conditions,” the company wrote in a filing with the SEC. “Under the restructure plan, we expect to reduce our headcount by approximately 10% over the rest of the fiscal year 2023, through a combination of voluntary attrition and personnel reductions.”
Micron also said it would suspend bonus payments to employees for the fiscal year of 2023, which started in September.
Earnings turn to losses
Micron missed analyst estimates for both earnings and revenue. An analyst consensus had Micron losing one cent per share on an adjusted basis – but the earnings swung to a four cent per share loss. Revenue came in at $4.09 billion for the quarter instead of the $4.11 billion analysts expected.
Idahoans who have followed Micron over the decades know that the company follows the supply and demand cycle of semiconductors closely. Current Micron CEO Sanjay Mehrotra said right now, there’s too much supply and not enough demand. The company has too much inventory and has lost pricing power.
“In the last several months, we have seen a dramatic drop in demand,” he said in a statement. He said profitability for the rest of the year will continue to be challenging but could recover later in the fiscal year, which runs through August.
“We are projecting inventory will be in a relatively healthier position (by mid-calendar year 2023),” Mehrotra said in an analyst call.
He said they expect to see “strong demand growth across diverse end markets” in the longer term.
Micron will also cut its capital expenditures for the rest of the year, and expects to do so next year, as well. Capital expenditures will range from $7 billion to $7.5 billion for the year, instead of an earlier $8 billion target. The company said it will also lower discretionary spending.
Impact on expansion unknown
Micron has announced it would spend $15 billion in expansion at its site in Boise through 2030, and hire as many as 7,000 new workers. It also announced it would spend $100 billion in expansion at a site in New York, with tens of thousands of new jobs in that state. The company did not address the impact of the moves announced today on those longer-term plans. The company just last week held a groundbreaking for a solar facility in conjunction with Idaho Power.
According to the Idaho Department of Labor, Micron employs more than 5,000 employees in Idaho as of November 2021. The company did not say how it would distribute job cuts.
