Micron In talks with Italian government to reduce workforce by 40%
Micron is talking to the Italian government and Italian unions about 419 proposed job cuts in its Italian workforce.
The cuts are part of a ‘less than 5%’ worldwide job reduction programme announced last August.
Since Micron has 27,000 employees worldwide, a less than 5% reduction means the loss of under 1350 jobs worldwide.
That 419 of these 1350 worldwide job cuts should fall on Italian employees seems disproportionate.
Micron has 1028 employees in the Italian operation it bought as part of its Numonyx acquisition in 2010. That 40% of these should be now axed as part of a worldwide programme to cut less than 5% needs explanation.
An industry analyst explains: “You need R&D near the fab.” The Italian employees facing the sack are working in technology development and Micron’s fabs are in Singapore and America.
Another explanation could be that Numonyx was mostly a NOR flash company and the NOR flash market is declining.
However, the NAND flash market is buoyant and Micron’s experienced Italian flash memory developers could help in the effort to develop vertical stacked NAND flash on which Micron’s future in the flash market depends.
A big part of Micron’s stacked NAND flash development effort is happening in Europe at Imec. Micron hopes to have a product out on the market by the end of next year. Getting that product ready for market would require, you would think, every human resource the company can command.
As things are, the decision to sack 40% of its development team has caused consternation and some bitterness in Italy.
A Micron employee told EW: “Unions have angrily reacted to what has been compared to an act of piracy, from a US company that bought a competitor (Numonyx) no more than four years ago, stripped it of patents, products and customers and now is proceeding with a delocalisation process.”
Furthermore Micron’s financial position has changed out of all recognition from when it was drawing up plans to axe 5% of its workforce last summer.
Micron’s newly-gained position as one of only three major DRAM companies means it has seen its fortunes transformed as DRAM prices soar while supplies are constrained.
In the three months to the end of November Micron had revenues which increased 70% on the prior quarter to $4 billion for a net profit of $358 million.
Micron had such a great year last year that it more than doubled its revenues to $14.2 billion from $6.8 billion in 2012, according to analysts IHS.
Micron grew faster last year than any of the 150 semiconductor companies tracked by IHS becoming the fourth largest semiconductor company in the world.
Micron has a long and successful record as an employer in Italy having bought TI’s Avezzano fab 15 years ago and running it well until selling it to LFoundry last year.
This new action to sack 40% of its Italian workforce seems out of character and would be a blight on the company’s reputation in Europe, particularly when Micron is doing so well financially and pursuing substantial new opportunities.