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Micron Cuts Operating Costs. Reduces Workforce by 10%

by Anton Shilov
02/19/2003 | 08:25 PM

Just a day ago we noted that the industry was expected to rebound this year (see this news-story) and today Micron Technology announced a series of cost-reduction initiatives including massive workforce reduction to help the company to finance its migration to 0.11 micron manufacturing process technology. The company's steps to take clearly show us that Micron is not really sure in great demand on all its products even towards they year's end.

In order to strengthen financial state of the company the following actions are planned:

Reducing worldwide workforce levels by approximately 10%, or 1800 people.
Increasing focus on products strategically aligned to utilise Micron's process technology.
Prioritizing Micron's product portfolio to better emphasize those products with the greatest market opportunity.
Aligning Micron's cost structure with current market conditions.

It is clear that the first step is aimed to lower long-term operating costs because this quarter Micron Technology will have to pay compensations to the former workers and these are large sums, as AMD showed last quarter. In case a company lays off a lot of people, they must prepare for the worst, so, prospects of Micron are not really bright at all at the moment. As for all all the other measures, they appear to be quite logical and should help the company to improve its efficiency right after they are done.

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