Tech Layoff: Micron Announces Job Cut, Suspends Bonuses As Chip Demand Drops

Apart from layoff, employee bonuses will also be suspended next year and executive salaries will be reduced for the remainder of the 2023 fiscal year which runs through August, the company said.

Micron Layoff: Chip-maker Micron has announced that it will reduce its workforce by about 10 per cent in 2023 in response to challenging industry conditions. The company said that it will also suspend employee bonuses next year. The announcement comes after the company struggles to deal with too much supply amid drop in demand.

CEO Sanjay Mehrotra announced the restructuring during during a quarterly conference call with investors, noting that prices for computer memory products had “deteriorated significantly” in recent months, Boise television station KTVB reported.

“The company will cut staff by about 10% throughout 2023 through voluntary departures and layoffs, according to a filing with the Securities and Exchange Commission. Employee bonuses will also be suspended next year and executive salaries will be reduced for the remainder of the 2023 fiscal year which runs through August”, the company said.

In the current quarter, the company said it expected a loss of 62 cents per share on revenue of $3.8 billion. Sanjay Mehrotra explained that there is too much supply of memory and not enough demand, which has resulted in the company keeping inventory and losing pricing power.”

In the last several months, we have seen a dramatic drop in demand,” said Mehrotra.”While the environment remains challenging, we currently expect second-half fiscal 2023 revenue to improve from the first half,” he added.

The company primarily makes two kinds of chips: NAND, which saves data when power is removed, such as in a portable flash drive, and DRAM, which must be powered on to hold data.