Micron Technology to cut 10% of workforce as chip market doldrums continue
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Micron Technology (NASDAQ:MU) on Wednesday said that it will cut its workforce by 10%, and keep tightening its financial belt in 2023 as it foresees more negativity across the semiconductor market.
Micron (MU) gave its business assessment along with its fiscal first-quarter results after Wednesday's stock market close. Based on its recent employee numbers, Micron (MU) would be cutting almost 5,000 workers in the year ahead.
The memory chipmaker said that for its fiscal second quarter, it expects to lose between 52 cents and 72 cents a share, excluding one-time items, on revenue in a range of $3.6B to $4B. Micron (MU) said that "over the next few months", it expects "gradually improving demand trends for memory as customer inventory levels improve further, new CPU platforms are launched, and China's demand starts to grow as its economy reopens."
Still, Micron (MU) was quick to add that it expects "industry profitability will remain challenged" throughout 2023.
In a statement, Micron (MU) Chief Executive Sanjay Mehrotra said that the company is "taking decisive actions to cut our supply and expenses" and that it expects improvements in customer inventories to improve and enable revenue to start growing in the second half of next year.
Mehrotra added that he believes Micron (MU) will be able to "deliver strong profitability once we get past this downturn."
Reaction to Micron's (MU) outlook was mildly negative in after-hours trading as the company's stock slipped by almost 2%.
Along with Micron's (MU) outlook, the company also reported a fiscal first-quarter loss of 4 cents a share, excluding one-time items, on revenue of $4.09B. Wall Street analysts had previously forecast Micron (MU) to lose 2 cents a share on $4.14B in revenue.
Despite falling short of analysts' consensus estimates, Mehrotra said Micron's (MU) results were within its own estimate range "despite challenging conditions during the quarter."
Earlier this month, Deutsche Bank analyst Sidney Ho cut his rating on Micron's (MU) stock on the grounds that the downturn in the memory chip market might last longer than expected.