As it spends billions of dollars building new chip plants in the US, Micron confirms it will axe 10 percent of its workforce
Micron Technology has confirmed it will reduce its workforce by about 10 percent in 2023.
The confirmation came in a recent SEC filing, in which the American chip maker said it would reach its staff reduction target via voluntary departures as well as layoffs.
It has blamed the cuts on falling demand for memory chips, amid the ongoing decline in the PC market.
“On 21 December, we announced a restructure plan in response to challenging industry conditions,” the company said in its filing. “Under the restructure plan, we expect to reduce our headcount by approximately 10 percent over calendar year 2023, through a combination of voluntary attrition and personnel reductions”
“In connection with the plan, we expect to incur charges of at least $30 million in the second quarter of fiscal 2023, substantially all in cash expenditures,” it added.
Idaho-based Micron is the largest maker of memory chips in the United States and has about 48,000 employees.
A 10 percent staff reduction of its 48,000 strong workforce, roughly translates to 4,800 job losses.
Micron CEO Sanjay Mehrotra has reportedly said there is too much memory supply and not enough demand, which has resulted in the company keeping more inventory and losing pricing power.
“In the last several months, we have seen a dramatic drop in demand,” Mehrotra was quoted by CNBC as saying.
Despite this, the firm is still heavily spending on building new fabs in the US.
In October Micro confirmed it would spend up to $100 billion in order to build “the largest semiconductor fabrication facility in the history of the United States.”
That came after Micron broke ground for a $15 billion (£13bn) memory chip plant in Boise, Idaho in September.
Micron controls about 11 percent of the global memory chip market, with a key rival being Chinese memory chipmaker YMTC, which was founded only in 2016 but has already taken about 5 percent of the market.
However earlier this month YMTC and 21 Chinese ‘major’ entities in the AI chip sector were added to the US entity list, which will severely hamper their access to the latest tech.