Semiconductor maker Micron introduced Wednesday that it could 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.
Idaho-based Micron has about 48,000 staff, in keeping with a latest SEC submitting. The firm mentioned it could hit its discount goal by means 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 filing. “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 results 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.eight billion within the present quarter. Analysts had anticipated steerage of a lack of 30 cents per share on $3.75 billion in gross sales.
Micron is greatest identified for supplying reminiscence to pc makers, however it’s going through an setting the place PC gross sales have already started to slow or shrink, whereas server gross sales are anticipated to indicate little development in 2023.
Micron CEO Sanjay Mehrotra mentioned in prepared remarks that there’s an excessive amount of reminiscence provide and never sufficient demand, which has resulted within the firm protecting extra stock and shedding pricing energy.
“In the last several months, we have seen a dramatic drop in demand,” Mehrotra mentioned, in keeping with the ready remarks.
He mentioned he expects the corporate’s profitability to “remain challenged” by means of the tip of 2023 however that the agency expects income and free money move to get better later in 2023. Micron mentioned it has suspended share repurchases.
Micron’s restructuring comes after different semiconductor corporations have introduced hiring freezes or layoffs. In October, Intel introduced that it would lay off workers 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 corporations adjusting after two pandemic-fueled years of development and provide points. Tech companies including Meta, Twitter, Snap, Stripe and Tesla have additionally reduce staff as corporations gird for a possible recession and better rates of interest.
