Micron will reduce its workforce by 10% next year and take other cost-cutting measures as the computer memory chip maker struggles to deal with too much supply amid a drop in demand. 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.
Other semiconductor companies have announced hiring freezes or layoffs. In October, Intel announced that it would lay off workers as part of a plan to cut $10 billion in spending. Nvidia announced a hiring slowdown over the summer, and Qualcomm announced its hiring freeze in November.
Following on from news from Micron, Nvidia declined more than 6%. AMD fell 1% and Qualcomm was down 4%. Lam Research took a sharp dive, dropping 9%, while Applied Materials plunged 8%.
Why it matters
Unit volumes for personal computers and smartphones have declined in 2022. 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. “The industry is experiencing the most severe imbalance between supply and demand in both DRAM and NAND in the last 13 years,” explained Micron CEO Sanjay Mehrotra.