Micron to cut 10% of work force

Business news | December 28, 2022

By Peter Clarke

Memory & Data Storage

Memory chip maker Micron Technology Inc. (Boise, Idaho), has said it plans to cut its work force by 10 percent during 2023 and that executives’ salaries will be cut, after it posted weak financial results for its fiscal 1Q23.

The sharp “belt-tightening” comes despite the recent announcement of some substantial long-term plans, such as the building of wafer fab in New York State (see Micron to build $100 billion megafab in New York state).

Micron posted a net loss of US$195 million on revenue of US$4.085 billion. The sales revenue was down 46.9 percent from revenue of US$7.687 billion in the same quarter a year before. In the previous quarter Micron made a net profit of US$1.49 billion on revenues of US$6.64 billion

CEO Sanjay Mehrotra said Micron’s profitability would be challenged throughout 2023 and getting back into profit would depend on how quickly supply and demand are brought into balance and inventories are normalized across the supply chain.

Mehrotra also listed a number of actions the company is taking:

Reducing wafer starts by about 20 percent immediately, which was previously announced (see Micron cuts memory production by 20%);
reducing capital expenditure to reduce bit supply growth in 2023 and 2024;
slowing the introduction of process node improvements;
and cuts to headcount.

The fiscal 2023 capex was reset at $7.0 billion to $7.5 billion, down from $8.0 billion representing a 40 percent drop from fiscal 2022. “We expect fiscal 2024 WFE [wafer fab equipment] to fall from fiscal 2023 levels, even as construction spending increases year on year,” said Mehrotra in prepared remarks.

“Given our decision to slow the 1ß DRAM production ramp, we expect that our 1γ (1-gamma) introduction will now be in 2025. Similarly, our next NAND node beyond 232-layer will be delayed to align to the new demand outlook and required supply growth,” he said.

And on the job and salary cuts he said: “Executive salaries are also being cut for the remainder of fiscal 2023, and over the course of calendar year 2023, we are reducing our headcount by approximately 10 percent through a combination of voluntary attrition and personnel reductions.”