Tech companies are on a spree of job cuts and hiring freezes. Many big companies like Amazon, Intel, HP, and Apple have announced a reduction in the workforce for next year. Joining this group today is the chipmaking major Micron Technology. The company, in its report for Fiscal Q1 2023 Earnings, has announced its plan to reduce the headcount by 10 per cent in 2023.
According to a recent CNBC report, Micron has 48,000 employees which means nearly 5000 employees could be affected. The company said that the industry is experiencing the “most severe imbalance between supply and demand in both DRAM and NAND in the last 13 years.”
The company said that it is making significant cuts to its capital expenditures
(Capex) and wafer starts along with also taking measures to cut its costs and operating expenditures (Opex).
Micron Technology builds memory and storage solutions for computers. The company is the first to market with 1ß (1-beta) DRAM and 232-layer NAND. “Our 1ß DRAM node, which we introduced in fiscal Q1, delivers around a 15% power efficiency improvement and more than a 35% bit density improvement vs. 1α (1-alpha). 1ß will be used across our product portfolio including DDR5 (D5), LP5, HBM and graphics,” the company mentioned in its report.
The company forecasts that “profitability will remain challenged throughout 2023” due to supply-demand mismatch in the coming year. The company is therefore taking multiple actions to align supply with demand and protect its balance sheet. It is reducing its Capex investments followed by a reducing wafer starts for DRAM and NAND by approximately 20%.
The company will also take significant steps to reduce its costs and operating expenses. “We project our spending to decrease through the year, driven by reductions in external spending, productivity programs across the business, suspension of a 2023 bonus companywide, select product program reductions and lower discretionary spend,” reads the report. The company also plans to cut executive salaries in 2023.