Micron Tech Cutting Up To 2,000 More Jobs

Just 2 months after saying more local job cuts weren't expected, computer chip maker Micron Technology announced it will slash as many as 2,000 workers by the end of August & phase out certain manufacturing operations at its Boise, ID facility, amid the weak economy & lower demand for its DRAM memory chips. The company said it'll end manufacturing of DRAMs on 200-millimeter wafers in Boise, cutting 500 jobs in the near term. The 200-millimeter wafers are being shelved in favor of 300-millimeter wafer plants, which are more cost-effective. Micron makes DRAM, or dynamic random access memory, a type of memory chip that has suffered in the last two years from oversupply and pricing pressure on chips used in personal computers and the slumping automobile industry. Its rivals also are hurting. South Korea's Hynix Semiconductor posted five consecutive quarterly losses, including nearly $1 billion in the 3 months ending Dec. 31, while German memory-chip maker Qimonda AG filed for bankruptcy protection in January. Hynix's said DRAM prices dropped 43% from the 3rd-Q. Micron's latest cuts come on top of a 15% companywide layoff announced last October, in which it eliminated about 3,000 of its 19,000 total positions. About 1,500 of those were in Boise, as it shut the NAND flash memory plant it operated as part of a joint venture with Intel Corp. Now, Micron will employ just over 5,000 in the state, down from over 10,000 two years ago. Once Idaho's largest private employer, it will trail St. Luke's hospitals & Wal-Mart Stores, that have 7,500 workers. The latest action will cost Micron about $50M, but is expected to generate annual cash savings of about $150 M. Micron plans to keep its 300mm R&D fabrication facility at its site in the desert near Boise, where it does product design & support, quality control & also has corporate and general services offices.They said those vital services for the company. It said the 200mm wafer manufacturing facilities being shuttered will be kept in a "warm-down state" and could eventually be used for additional, unspecified manufacturing activities. The company doesn't expects the moves will result in any disruption in product supply to customers. "We remained hopeful the demand for these products would stabilize in the marketplace and start to improve as we moved into the spring. Unfortunately, a better environment has not materialized, and we are at a point where we wanted to let our employees & the community know in advance what will occur later this summer," said Steve Appleton, Chairman & CEO, in a statement. Addressing shareholders in Dec. 2008, Appleton said Micron would continue to evaluate staffing levels as dictated by the market, but didn't foresee more staffing cuts in Boise. In response to the layoffs, Gov. Otter ordered employees at the state Dept. of Labor to extend their hours in the Boise area, to help those affected. "All state government stands ready to assist people facing the challenges of unemployment, job training & placement needs," he said in a statement. The state's already seen its unemployment rate more than double, to 6.6% in the past year, with the expectation it will exceed 7% within months. The announcement can accelerate that, at a time when 48,000 unemployed workers in ID already received $12.8M in regular and fed extended benefits last week.