Micron Technology has reported decline in its earnings and revenues in the current fiscal year. Hence, the technology company has announced that it will cut 10% jobs during the next year.
Micron Technology is the largest manufacturer of memory chips in United States. However, the company has reported loss during the last fiscal quarter amid decline in sales of memory chips globally. Therefore, in wake of declining demand and challenging industry conditions, the chips maker has announced a restructuring plan. “On December 21, 2022, we announced a restructure plan in response to challenging industry conditions. Under the restructure plan, we expect to reduce our headcount by approximately 10% over the rest of the fiscal year 2023, through a combination of voluntary attrition and personnel reductions.” The company wrote in a filing with SEC.
Reduction in demand of chips
The company’s CEO stated that there is too much supply. However, the demand has reduced significantly which is hampering company’s profits and earnings. Moreover, the company has a huge inventory and are losing the pricing power. Hence, Micron has decided to bring restructuring at the firms. Cutting 10% jobs is the key part of restructuring. Moreover, the company is planning to achieve this goal through a combination of voluntary turnover and layoffs. Furthermore, the company is expecting to incur $30 million in terms of cost related to job cuts. In addition, Micron has also suspended bonus payments to employees for the fiscal year of 2023.
Micron’s CEO stance
“Due to the significant supply demand mismatch entering calendar 2023, we expect that profitability will remain challenged throughout 2023. The timing of the recovery in profitability will be driven by the rate and pace at which supply and demand are brought into balance and inventories are normalized across the supply chain.” Sanjay Mehrotra, Micron’s CEO and President said in a statement.
Micron has an active workforce of 48,500 across the globe. A reduction on 10% jobs implies that the company will cut approximately 5,000 jobs during the coming year. However, the company has not provided any information regarding the division of job cuts between U.S. and overseas employees.
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