Micron To Slash 10% of its Workforce Next Year

Semiconductor producer Micron announced it will slash its workforce by around 10% in 2023, the latest sign of a slowdown in the technology industry's impact on employment.

Micron's Headquarter in Singapore

A report on CNBC says that the company employs over 48,000 people and  it would meet its reduction target through a combination of layoffs and voluntary departures. The company also announced that bonus payments for 2023 would be put on hold.

The business announced in an SEC filing that they plan to reorganise the company "in response to tough industry circumstances." According to the plan, their workforce will be reduced by around 10% through a combination of voluntary resignation and layoffs by the end of 2023.

Micron predicted a $30 million penalty for the current quarter as a result of the reorganisation, which would also result in reduced investment in production capacity and cost-cutting initiatives.  This comes after Micron disclosed profits and sales for the fiscal first quarter of 2023 that fell short of analyst projections and forecast a larger loss per share than expected for the current quarter.

Well-known for producing computer memory and its own ranged Crucial RAMs & SSDs, it is now dealing in an industry where PC sales have already begun to shrink and server sales are also predicted to show little growth in 2023.

Micron CEO Sanjay Mehrotra claims that the business must hold more inventory than usual due to low demand.  However, he went on to note that the business anticipates a recovery in sales and free cash flow later in 2023, even if profitability would "remain challenging" until the year's conclusion.

Other semiconductor firms have also announced employment restrictions or layoffs prior to Micron's restructure. Intel announced layoffs in October as part of a $10 billion cost-cutting initiative. Both Nvidia and Qualcomm announced hiring freezes this year; Nvidia's was in the summer while Qualcomm's was in November.

After two years of growth resulting from the global epidemic, the semiconductor industry isn't the only one making cuts. Meta, Twitter, Snap, Stripe, and Tesla are just some of the tech giants that have reduced headcount in preparation for a possible economic downturn and subsequent increase in interest rates.