Micron will cut 10 percent of all jobs worldwide to increase profitability. The number of deliveries has fallen sharply in the past year, so the company warns that it will make less profit in the coming year.
In the past two quarters, the number of deliveries has fallen sharply, while Micron could not reduce production quickly enough. As a result, the company continued to produce too many chips, so that it now has an inventory worth $ 8.4 billion. The average days of inventory, or the number of days of stock that Micron now has, has risen to 214 days. Micron expected that that stock will peak in the coming quarter and gradually improve thereafter.
The company says that in virtually all markets, such as smartphones and PCs, demand for and price for memory and storage fell. Micron speaks of a ‘significant imbalance in supply and demand’. The company is therefore reducing investments for 2023 from USD 8 billion to USD 7 to USD 7.5 billion. In 2022, the company still invested a total of 12 billion dollars.
The chip manufacturer will also reduce the production of dram and nand wafers by 20 percent, as it had previously announced. Furthermore, the company will no longer pay bonuses this year, the salaries of high-ranking employees will be reduced and ten percent of all jobs will be cut. This will also include compulsory redundancies.
Micron had a turnover of 6.6 billion dollars in the past quarter, which is equivalent to 6.3 billion euros. The net profit was 1.5 billion dollars, or 1.4 billion euros. In the same period a year ago, the company had sales of $8.3 billion and a net profit of $2.4 billion. The manufacturer expects sales of $ 3.8 billion for the next quarter.