Micron Electronics Inc. will shift about 450 jobs to its parent company but still expects a "significant operating loss" during the second quarter because it made too many notebook personal computers.
The manufacturer also said Tuesday that it would consolidate its NetFRAME computer network server operation, based in Milpitas, Calif., to its Nampa headquarters as part of a corporate restructuring."These actions position Micron Electronics as a leaner, more efficient company better prepared to compete effectively in a very competitive market," Joel Kocher, Micron Electronics' newly appointed president and chief operating officer, said in a statement issued by the company.
"We have significantly reduced the level of our operating expenses and believe we are in a better position to aggressively promote and price our high-performance PCs to our target customer base."
About 10 percent of the company's 4,500 employees will be reassigned to Micron Technology Inc., the Boise-based semiconductor manufacturer that owns a controlling interest in Micron Electronics.
The jobs being shifted reportedly include about 250 in Idaho, 100 in California and 100 in Minnesota. Micron Technology Vice President Kipp Bedard said the parent company has more than 650 job openings in dozens of employee categories in Boise, Lehi, Utah, and Santa Clara, Calif.
Employees who do not want to be reassigned will be offered a severance package, the company said.
Micron Electronics' net income for the first quarter of fiscal 1998 was $1.1 million, far below the $24.8 million it earned in the first quarter of the previous year.
The company said Tuesday that its expected second-quarter operating loss should be more than offset by the pre-tax gain of approximately $150 million realized on the sale of its Micron Custom Manufacturing Services subsidiary to New York-based Cornerstone Equity Investors.
That sale, involving 90 percent of Micron Electronics' interest in the contract manufacturing subsidiary, was announced in December and is expected to close Thursday.