Micron to cut 10 percent of jobs worldwide due to ‘supply and demand imbalance’

Micron will cut ten percent of all jobs worldwide to increase profitability. The number of deliveries has fallen rapidly in the past year, causing the company to warn that it will make less profit in the coming year.

Over the past two quarters, shipments have fallen sharply, while Micron has been unable to reduce production quickly enough. As a result, the company continued to produce too many chips, which means it now has an inventory worth $8.4 billion. The average days of inventory, or the number of days of inventory that Micron now has, has increased to 214 days. Micron expected that inventory will peak in the coming quarter and gradually improve thereafter.

The company says that in virtually all markets, such as smartphones and PCs, demand and prices for memory and storage fell. Micron talks about a ‘significant imbalance in supply and demand’. The company is therefore reducing investments for 2023 from $8 billion to $7 to $7.5 billion. In 2022, the company invested a total of $12 billion.

The chip manufacturer will also reduce the production of dram and nand wafers by twenty percent, as it had previously announced. Furthermore, the company will no longer pay out 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 forced layoffs.

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 a turnover of $8.3 billion and a net profit of $2.4 billion. The manufacturer expects sales of $3.8 billion for the next quarter.