Chipmaker Micron Technology announced it will reduce employees by 10 percent next year due to tough business conditions in the semiconductor market.

US-based Micron Technology had about 48,000 employees worldwide as of September 1. Micron said it will also cut salary to its employees.

“Due to the significant supply demand mismatch entering calendar 2023, we expect that profitability will remain challenged throughout 2023,” Micron chief executive officer Sanjay Mehrotra said.

Micron said it will reduce investments in fiscal 2023 to $7-$7.5 billion in the wake of lower demand against the earlier target of $8 billion. Micron it would be significantly reducing Capex plans in fiscal 2024. Micron invested $12 billion in fiscal 2022.

Micron said this represents an approximately 40 percent reduction. Micron said it expects fiscal 2023 wafer fab equipment (WFE) Capex to be down more than 50 percent. Micron has reduced near-term bit supply through a sharp reduction in wafer starts. Micron reduced wafer starts for DRAM and NAND by approximately 20 percent.

Since Micron has decided to slow the 1ß DRAM production ramp and the launch of 1γ (1-gamma) will be in 2025. Similarly, next NAND node beyond 232-layer will be delayed to align to the new demand outlook, Micron said.

Micron’s investments were $2.47 billion in the first quarter of fiscal 2023.

Micron, the first major chip maker to alert the market of the downturn over the summer, previously said it would be cutting investments in 2023 without revealing more details on its focus areas.

Micron forecast second-quarter revenue of $3.8 billion, plus or minus $200 million. But it forecast a loss of 62 cents per share plus or minus 10 cents.

Micron expects that DRAM and NAND industry supply growth in calendar year 2023 will be well below their long-term CAGRs and also well below expected demand growth in 2022.

“The message overall is very much status quo,” said Matthew Bryson, analyst at Wedbush Securities. “There’s no sign that memory is yet recovering from declining fundamentals, but Micron is continuing to work to create a better future supply demand dynamic.”

Micron’s revenue for the first quarter ended Nov. 30 fell about 47 percent year on year to $4.09 billion. It had a net loss of $195 million, or 18 cents per share, compared with a profit of $2.31 billion, or $2.04 per share, a year earlier.

Micron Technology generated revenue of $1.7 billion from Compute and Networking Business, $1.0 billion from Embedded Business, $680 million from Storage Business, and $655 million from Mobile Business.