Micron Technology, formerly the state's largest private employer, announced today that it'll phase out manufacturing of 200 mm wafers at its Boise plant, meaning 500 layoffs "in the near term" and "as many as 2,000 positions by the end of the company's fiscal year." In a press release, Steve Appleton, Micron chairman and CEO, said, “We remained hopeful that 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 and the community know in advance what will occur later this summer.”
Gov. Butch Otter responded with a pledge of state assistance, including extending hours at Treasure Valley unemployment offices. “All of state government stands ready to assist people facing the challenges of unemployment, job training and placement needs," Otter said. "I am directing Roger Madsen and his crew at the Idaho Department of Labor to extend their hours at Treasure Valley employment offices, and I want to assure everyone that our state employees and resources are focused on serving Idaho citizens at this difficult time." Click below to read Micron's press release and the full story from AP reporter John Miller, which includes this tidbit: Once the new layoffs are complete, not only will Micron no longer be Idaho's largest private employer, it will trail St. Luke's hospitals and Wal-Mart Stores Inc., which have some 7,500 workers each.
Micron press release:
Micron Technology Responds to Continued Decreases in Demand
Boise, Idaho , Monday, February 23, 2009 – Deteriorating economic conditions and decreased demand for 200 millimeter (mm) specialty DRAM products have created additional challenges for Micron Technology, Inc.’s Boise manufacturing operations. As a result, Micron announced today that it will phase out 200mm wafer manufacturing operations at the company’s Boise facility. This action will reduce employment at Micron’s Idaho sites by approximately 500 employees in the near term and as many as 2,000 positions by the end of the company’s fiscal year. The company has sufficient manufacturing capacity remaining and does not expect any disruption in product supply required for customer needs.
“We remained hopeful that 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 and the community know in advance what will occur later this summer,” said Steve Appleton, Micron Chairman and CEO.
The company will continue to operate its 300mm research and development fabrication facility at the Boise site and perform a variety of other activities, including reticle manufacturing, product design and support, quality assurance, systems integration and related manufacturing, corporate and general services. These workforce changes were not anticipated or included in Micron’s earlier 15 percent global workforce reduction announcement last October. Following these changes, Micron will employ more than 5,000 in the state.
Cash restructuring charges will be approximately $50 million, which will generate a gross annualized operating cash benefit of $150 million. The net operating cash flow effect will be neutral for fiscal year 2009.
Micron is committed to assisting employees affected by the workforce reductions and is providing severance and outplacement services.
Micron to cut another 2,000 jobs in Idaho
By JOHN MILLER
Associated Press Writer
BOISE, Idaho (AP) — Micron Technology Inc. said Monday it's eliminating 2,000 more jobs in Idaho and closing a manufacturing plant due to decreased demand for its memory chips.
The Boise-based company will cut 500 positions in the "near term," with the remaining positions stricken by August.
After that, Micron will employ just over 5,000 people in the state, down from more than 10,000 two years ago. Once Idaho's largest private employer, it will trail St. Luke's hospitals and Wal-Mart Stores Inc., which have some 7,500 workers here.
Micron, whose losses since 2007 exceed $2.5 billion, is shuttering manufacturing operations in Boise, where it made specialty dynamic access memory, or DRAM, products from 200 mm silicon wafers. Like others in its industry, Micron has been hurt by oversupply and pricing pressure on chips used in personal computers and the slumping automobile industry.
"We remained hopeful that the demand for these products would stabilize in the marketplace," Chairman and CEO Steve Appleton said in a statement. "Unfortunately, a better environment has not materialized, and we are at a point where we wanted to let our employees and the community know in advance what will occur later this summer."
South Korea's Hynix Semiconductor has posted five consecutive quarterly losses, including nearly $1 billion in the three months ending Dec. 31, while German memory-chip maker Qimonda AG filed for bankruptcy protection in January.
Hynix has said DRAM prices dropped 43 percent from the third quarter.
Micron's cuts come on top of a 15 percent 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 down the NAND flash memory plant it operated as part of a joint venture with Intel Corp.
The cuts announced Monday weren't anticipated when the previous layoffs were announced last year, the company said. The layoffs will cost it $50 million but boost its gross annualized operating cash by $150 million, it said.
Micron plans to keep its 300 mm research and development fabrication facility at its site in the desert near Boise, where it does product design and support, quality control and also has corporate and general services offices.
Spokesman Dan Francisco called those vital services for the company.
He said the 200 mm wafer manufacturing facilities being shuttered will be kept in a "warm-down state" and could eventually be used for additional, unspecified manufacturing activities.
In response to the layoffs, Gov. C.L. "Butch" Otter ordered employees at the state Department of Labor to extend their hours in the Boise area, to help those affected.
"All of state government stands ready to assist people facing the challenges of unemployment, job training and placement needs," Otter said in a statement.
The state has already seen its unemployment rate more than double, to 6.6 percent in the past year, with the expectation that will exceed 7 percent within months. The Micron announcement could accelerate that, at a time when 48,000 unemployed workers in Idaho already received $12.8 million in regular and federal extended benefits last week.
Copyright 2009 The Associated Press.