Micron Technology will cut about 15 percent of its global work force as part of a restructuring of its computer-memory-chip operations.
BOISE, Idaho — Micron Technology will cut about 15 percent of its global work force as part of a restructuring of its computer-memory-chip operations, the company said Thursday.
The bulk of the job losses will be in Boise, where the semiconductor company is headquartered.
A company statement said the cuts were a result of declining customer demand and product oversupply, which have driven the selling price for Nand flash memory below manufacturing costs.
Micron will shut down the Nand flash-memory plant in Boise that it operates as part of a joint venture with Intel, it said. Nand memory is used in digital cameras and mobile phones
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Micron will continue making such chips in its other locations. Micron and Santa Clara, Calif.-based Intel operate plants in Lehi, Utah, and Manassas, Va., that produce the chips.
The job cuts will take place over the next two years, starting with a voluntary program. Micron officials say the company will provide severance and outplacement services.
Micron employs about 19,000 people worldwide. A reduction of 15 percent would mean 2,850 fewer employees, and company spokesman Dan Francisco said roughly 1,500 of the cuts would be made in the Boise area.
“I believe we’re still the largest private employer in the state, and while this isn’t good news for us or our employees or anyone in the community, we’re doing what we have to do to remain competitive and protect the employees that are still here,” said Mark Durcan, Micron’s president and chief operating officer.
The company has posted nearly $2 billion in losses since 2007, and more than 1,000 Micron workers have been laid off in the past few years.
The cuts announced Thursday contrast with Durcan’s statements in March, when he said Boise would be the best place for Micron to build a plant capable of producing the next generation of memory chips. At the time, Durcan said Boise was the front-runner because of the existing Micron research and development offices there and because of a series of tax incentives passed by the Legislature three years ago.
A new fabrication plant in Boise is only “aspirational” and won’t likely happen any time soon, Durcan acknowledged in a phone interview Thursday.
Despite the poor earnings and job reductions, Durcan maintained Micron was still strong when compared with other companies in the industry. “But the memory market is a disaster worldwide,” he said.
Employees who volunteer to be cut will be given six weeks’ pay, along with the severance package that will be offered to all the employees who are cut.
The job cuts will cost $60 million and lead to savings next year of about $175 million.
Micron stock rose 1 cent to $3.88 Thursday, putting it among the 250 or so companies trading on the New York Stock Exchange that posted advances Thursday, compared with 3,000 that fell. Micron stock, however, has lost 46 percent this year.
Information from Bloomberg News
is included in this report.