BOISE — Micron Technology, Inc. has been shrinking its workforce in the last year, but it is unclear by how much.
Several past and current employees, who spoke to the Idaho Press on the condition of anonymity, said the Boise technology and economic powerhouse has been shedding employees under the radar, both through layoffs and a bell curve that ranks employees and systematically eliminates those who score low.
In a statement, the company acknowledged the cuts but did not confirm just how many employees had lost their jobs.
"Micron recognizes that many team members have been with the company for many years, and we do not take these proposed decisions lightly," spokeswoman Erica Pompen said in an email to the Idaho Press. "Our commitment is to offer all possible assistance to our team members through this transition."
Micron, which makes semiconductors, has been historically one of the Treasure Valley's top private employers and a key driver of the local economy. Micron reportedly employed as many as 11,000 employees in Boise at one time, but now the company said it has "6,000 plus" employees but will not confirm the specific number. The company, which started in Boise in 1978, now has 39 locations around the world and $47 billion in assets, with $13.7 billion in revenue for the first half of 2019.
In multiple interviews, employees of Micron said the company closed its remaining Boise assembly area, referred to as “back-end,” and dramatically downsized other departments. Employees report some workers were given as much as a year notice before their jobs were to be eliminated, giving them time to travel to a Micron plant in Taiwan to train overseas workers to do their work. In other cases, Taiwanese employees visited Boise for training.
In an email, Pompen confirmed the closure of the back-end assembly and outsourcing to a third-party vendor but did not provide details.
This news comes on the heels of the company investing $3 billion into expanding its plant in Manassas, Virginia, and creating 1,100 new jobs for engineers and technicians in the Washington, D.C., suburb. Virginia’s Economic Development Partnership gave the company a $70 million cash incentive for the project.
The Idaho Press spoke with two current employees at Micron and four past employees for this story. Thomas Anderson, a current employee whose name has been changed, said his department was running at full speed earlier this year, but production has significantly slowed since then. He said morale among those working in jobs related to manufacturing instead of engineering and development is especially low.
“We were just bustling in January, and now all you see are the footprints where the machines were,” he said. “I think that’s when it hits you that it’s not Micron that was fun to work for, it was all of these people (you worked with), whether you liked them or not. All of those relationships are just gone. Everybody has accepted they’re going to be gone.”
Anyone outside the company has no way of knowing exactly how many people currently work at Micron. In October, the Idaho Statesman cited numbers from the Boise Valley Economic Partnership saying the company employed between 6,000 and 6,999 people and placed the company as the Treasure Valley’s second-largest employer behind St. Luke’s Health System.
BVEP could not provide the Idaho Press with updated numbers — the longtime Micron employee who provided the group with that data has since retired, spokeswoman Meredith Stead. The Idaho Department of Labor also could not provide Micron's current employment numbers or confirm or deny a reduction in the company's workforce.
In addition to layoffs and the mothballing of entire departments, past and current employees said there were large reductions in staff due to a “stacked” rating system instituted in 2018. Every year, Micron employees are rated on their performance on a scale from one to five, according to employees interviewed by the Idaho Press. However, last year the ratings were on a bell curve, mandating in every department employees had to be rated across the entire spectrum. This meant no matter how high everyone on a team was performing, someone would be rated a five and someone would be rated a one or a two.
Those who received the bottom ranking were told they could either leave the company with a severance or go on a performance improvement plan to boost their rating. Brandon Smith, whose name has been changed, said he had worked for Micron for two decades as a designer before receiving a low rating and being given the choice to leave or try to improve. He ultimately decided to leave the company because he heard going on the improvement plan would not help him save his job. Other employees interviewed by the Idaho Press said they heard the same.
Smith had survived waves of layoffs at Micron before, but he said the company hasn’t eliminated workers through a performance review-related system before.
“It’s never been like this before,” he said. “Never.”
He provided The Idaho Press with several past years of performance reviews in which he had never been rated below a three, until he was given the rating of a one at the end of 2018.
Karl Ackerman, a San Francisco-based semiconductor industry analyst, said semiconductor prices in the market have been rapidly declining in recent months and putting Micron and its competitors in a bind. The computer chip market has been marked with waves of rapidly fluctuating prices for decades, which gives Micron years of booming profits and then periods of losses. Ackerman estimates the market has yet to hit bottom, which is why the company is working to cut costs.
“There’s a lot of people trying to estimate where are we in this cycle and if we are toward the end, but I don’t think so,” he said. “I think it lasts until the end of the year. If it lasts until the end of the year, that’s probably why Micron is taking those difficult actions of reducing some workforce headcount, while painful to the Boise economy.”
Another hit to Micron comes from the Trump administration. Last month, the U.S. Department of Commerce placed Chinese tech company Huawei on a list barring American companies from selling technology to Huawei without approval. Ackerman could not comment specifically on this move's impact, but he said Huawei made up 13 percent of Micron's sales prior to the sanctions.
Idaho Department of Labor research analyst supervisor Craig Shaul said he had no information on if Micron is cutting jobs, but he estimates every job loss at Micron will have an impact on the larger economy.
"A job at a semiconductor manufacturer would have a job multiplier of about 3, so you would anticipate that if they were to shed a job, that would have the potential to impact three other jobs in the Boise area and vice versa," Shaul said.
Federal law requires companies to notify the public of plant closures or mass layoffs, but the manner in which Micron has reportedly let its workers go may not trigger any requirements.
The Worker Adjustment and Retraining Notification Act, known as the WARN Act, covers all private companies and nonprofits. It sets requirements on when companies need to provide government and the general public 60 days' advance notice when a large number of employees is being let go. No WARN notices for Micron have been filed, according to the Idaho Department of Labor’s website.
The law requires companies laying off more than 500 employees in any 30-day period to report, or if 50 to 499 people are losing their jobs if they make up at least a third of the company's active workforce. Any job losses within a 90-day period are all counted toward the WARN threshold, unless the company can demonstrate the cuts are from “separate and distinct actions or causes.”
Because it is unknown how many employees Micron laid off and how many people worked there total, it is unclear if they hit this threshold. WARN is a U.S. Department of Labor regulation, but the agency itself does not enforce it. Instead, any violations are enforced by individual or class action lawsuits brought in district court.
CHANGING COMPANY CULTURE?
A few of those interviewed attributed the changes to Micron’s CEO Sanjay Mehrotra, the co-founder of SanDisk. Mehrotra took the helm at Micron in May 2017 after the retirement of longtime Micron executive Mark Durcan. The company has been profitable under his leadership and posted $1.62 billion in profit for the second quarter of 2019. This is down from $3.3 billion in profit in the same period last year.
Smith and others expressed frustration that Micron is turning a profit and still laying off workers, but others don’t see it that way.
Abby Jordan, whose name has been changed, is a current employee who has worked for Micron on and off since 2000 and said although she is unhappy with the performance review system, cutbacks in times of profit don’t bother her.
“I think we’re in cost-savings mode,” she said. “In the past, we’ve been really reactive, so we would keep going full steam ahead until we started losing money. And I feel like with this new CEO, he saw some concerns in the economy back in January, and they decided they were going to cost-cut.”
Some interviewed said they viewed the performance stacking as a thinly veiled way to eliminate older, white men from Micron’s workforce in favor of younger, more diverse employees. However, Anderson and Jordan, both current employees, disagreed with this assessment and said it was a general move by the company to downsize workers of all ages, genders and experience levels.
Jordan said employees who may have worked for Micron for years and hadn’t worked on continuing education might struggle in the increasingly fast-paced environment, which could be contributing to that rumor.
“Micron is a fast-paced company, and if you’re not keeping up and always learning something new, you could be pushed out,” she said. “You’re not being pushed out because you’re an old white dude; you’re getting pushed out because you’re not adjusting your thinking.”
NOT THE FIRST TIME
Since its founding in 1978, Micron has been one of the anchor points of Boise’s economy.
After humble beginnings in a small office, the company broke ground on its sprawling production plant on Federal Way south of Interstate 84 in 1980. The company saw quick success with its smaller designed Dynamic Random Access Memory chip and soon started hiring highly paid specialists to manufacture the product in the Treasure Valley, powering a new phase of economic growth for the city.
Despite early success, the semiconductor market is fickle. The company has ridden waves of boom and bust cycles due to oversupply in the market, competition from overseas and globalization, making it cheaper for the manufacturing to take place overseas.
In 1985, Micron hit hard times and laid off half of its workforce, but the company soon recovered. The company was adding thousands of employees in the early 1990s, starting from 4,095 in 1991 and climbing to just over 8,000 by the middle of the decade, according to annual company reports.
After years of high profits, Micron was hit with a wave of low market prices in 1996 and 1997 due to the high volume of chips available worldwide. The company rode out the problems in the market and kept pace. The company took losses through the late 1990s and into the new millennium.
According to the Idaho Statesman, the company laid off 1,100 Boise workers in 2003. This left 9,500 Idahoans left working for Micron in 2004 with 17,500 worldwide. Before the Great Recession, the Statesman reported, the company cycled back up again and employed 11,000 before cutting roughly another 1,100 in 2007. Another roughly 1,500 employees were given the ax in 2008, and by 2009 the company stopped manufacturing DRAM chips in Boise and sent another 2,000 employees out the door.
Employment numbers are always released at the discretion of private companies, said Department of Labor spokeswoman Georgia Smith. The department has only ever reported employment figures in ranges and can only release it with the express permission of a private company.
Despite the historic cycling down of manufacturing in Boise, the company continues to invest in its research and development arm in the Treasure Valley. Micron opened a new $350 million research and development building in 2017 and last summer was putting up a new office building to house employees, according to the Idaho Business Review and BoiseDev.com.
Mehrotra, Micron's CEO, was the keynote speaker at last month's Boise Technology Fair. He spoke highly of Micron’s history as an innovative company that has filed more than 40,000 patents in 40 years, and he pointed to the importance of keeping pace with an increasingly data-centric world. He praised technological improvements that were going to boost Micron’s work into the next century but acknowledged the possibility of job losses in the manufacturing sector.
“(Artificial intelligence) is going to result in job changes,” he told the crowd of several hundred. “Some of the jobs will be lost by AI, some of the jobs will be changed by AI, but what matters is we stay on top of this and stay on top of our talent and focus on reskilling, as well.”
After the remarks, an Idaho Press reporter approached him for comment on the reported job cuts, but his staffer said he was too busy for an interview and referred the reporter to email a company representative with further questions.