Micron To Reduce Workforce By Almost 5,000 Due to Plunging Demand
Micron Technology Inc. (MU) said it will cut 10% of its workers and suspend 2023 bonuses after it posted a quarterly loss, the latest Big Tech firm to retreat on jobs as the global economy slows.
The company announced the job cuts—which could eliminate roughly 4,800 positions—the same day that it posted disappointing results for the first quarter of its 2023 fiscal year, including a $195 million net loss and revenue that fell by almost half compared with the prior-year quarter. The firm also forecast a larger loss in second quarter than it previously expected.
Semiconductor manufacturers battled supply chain constraints in an effort to meet surging demand early in the pandemic. Now, inflation has weakened consumer appetite for computers, smartphones, and other products using these chips, leading to inventory gluts and a slowdown in semiconductor orders.
CEO Sanjay Mehrotra described the imbalance between supply and demand as the worst in over a decade.
Besides reducing headcount and bonuses, Micron will also trim its investments in manufacturing capacity. Micron expects that customer inventory levels will rebalance by the middle of 2023, leading to improved revenue for the chipmaker in the second half of the year.
Micron joins tech companies such as Tesla Inc. (TSLA), Meta Platforms Inc. (META), and Snap Inc. (SNAP) in cutting staff as interest rates rise and a potential recession looms.
Micron stock is down nearly 50% this year, a poor showing even among its beleaguered chipmaking peers. The Philadelphia Stock Exchange Semiconductor Index is down about 36% over the same period. Micron was trading near two-year lows at midday.
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