Micron announces 10% headcount cuts and bonus suspensions

semiconductor manufacturer micron It announced Wednesday that it will cut its staff by about 10% in 2023, in the latest example of the tech industry’s slowdown affecting hiring.

Micron shares fell more than 1% in extended trading.

The Idaho-based company, Micron, has about 48,000 employees, according to a recent SEC report. The company said it will achieve the reduction target through voluntary departures as well as layoffs.

Micron also said it would put 2023 bonuses on hold.

“On December 21, 2022, we announced a restructuring plan in response to challenging industry conditions,” the company said. in the SEC file. “As part of the restructuring plan, we expect to reduce our headcount by approximately 10% during calendar year 2023, through a combination of voluntary attrition and headcount reduction.”

Micron said it expects a $30 million charge in the current quarter related to the restructuring, which will also include lower investments in manufacturing capacity and cost-cutting programs.

The move comes as reported by Micron Results for the first fiscal quarter 2023 It missed analyst estimates for earnings and revenue, and forecast a larger loss per share than expected in the current quarter.

Here’s how Micron performed against Refinitiv consensus estimates for the quarter ending in December:

• share loss: $0.04, adjusted, versus my $0.01 estimate
• Revenues: $4.09 billion versus the $4.11 billion estimated

Micron said it expects a loss of 62 cents per share on revenue of $3.8 billion in the current quarter. Analysts had expected guidance of a loss of 30 cents per share on sales of $3.75 billion.

Micron is best known for supplying memory to PC makers, but it’s facing an environment that has already seen PC sales slow began to slow down or shrinkwhile server sales are expected to show slight growth in 2023.

Micron CEO Sanjay Mehrotra said in the prepared notes That there is too much supply of memory and insufficient demand, resulting in the company holding more inventory and losing pricing power.

“In the past few months, we have seen a significant dip in demand,” Mehrotra said, according to the prepared remarks.

He said he expects the company’s profitability to remain “challenged” through the end of 2023, but the company expects revenue and free cash flow to recover later in 2023. Micron said it had suspended share buybacks.

Micron’s restructuring comes after other semiconductor companies announced hiring freezes or layoffs. in October, Intel announce it You will lay off workers As part of a plan to cut $10 billion in spending. nvidia declared a The slowdown in hiring During the summer, and Qualcomm announce Hiring freeze in November.

But it’s not just a matter of semiconductor companies adjusting after two years of an epidemic of growth and supply issues. Technology companies incl metaTwitter, popand Stripe Tesla It also cut staff as companies prepare for a potential recession and higher interest rates.