Semiconductor maker Micron introduced Wednesday that it might cut back its headcount by about 10% in 2023, within the newest instance of a know-how business slowdown affecting employment.
Shares of Micron fell greater than 1% in prolonged buying and selling.
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Idaho-based Micron has about 48,000 staff, based on a latest SEC submitting. The firm mentioned it might hit its discount goal by way of voluntary departures in addition to layoffs.
Micron additionally mentioned it’s suspending 2023 bonuses.
“On December 21, 2022, we announced a restructure plan in response to challenging industry conditions,” the corporate mentioned in an SEC submitting. “Under the restructure plan, we expect to reduce our headcount by approximately 10% over calendar year 2023, through a combination of voluntary attrition and personnel reductions.”
Micron mentioned it anticipated a $30 million cost within the present quarter associated to the restructuring, which will even embrace 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.
Here’s 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 recognized for supplying reminiscence to laptop makers, however it’s going through an setting the place PC gross sales have already began to gradual or shrink, whereas server gross sales are anticipated to indicate 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 conserving extra stock and shedding pricing energy.
“In the last several months, we have seen a dramatic drop in demand,” Mehrotra mentioned, based on the ready remarks.
He mentioned he expects the corporate’s profitability to “remain challenged” by way of the top of 2023 however that the agency expects income and free money movement to recuperate 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 would lay off employees as a part of a plan to chop $10 billion in spending. Nvidia introduced a hiring slowdown over the summer time, and Qualcomm announced its hiring freeze in November.
But it is 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.