Texas Instruments on Monday said it was reducing its headcount by 3,400 as it gears up for a period of “prolonged” economic weakness.
The company is cutting 1,800 jobs, and an additional 1,600 staff are leaving for voluntary retirement or departures. In total, the company is reducing its headcount by 12 per cent.
The job cuts come as the company reported an 86 per cent year-over-year fall in net income for the fourth quarter of 2008. The company reported net income of US$107 million, compared to $753 million in the fourth quarter of 2007. The company also reported revenue of $2.49 billion, a 30 per cent fall year-over-year.
The company took charges of $254 million that included the job cuts and charges related to restructuring its wireless business announced in October. Factoring in restructuring of the wireless business, the staff cuts should yield annualized savings of about $700 million, according to the company.
The corrective action will reduce the company’s costs as the global economy continues to weaken, said Rich Templeton, TI chairman, president and CEO, in a statement. Most of the staff reduction will come from internal support functions and “non-core” product lines, Templeton said.
“By reducing expenses now, we keep TI financially strong and able to invest for future growth,” Templeton said. The company is not betting on a near-term economic rebound, he said.
A larger percentage of the company’s spending will now go toward developing and supporting analog and embedded processing products, Templeton said.
Texas Instruments joins a number of chip vendors taking action to cut costs. Intel last week announced it would cut as many as 6,000 jobs and shut down four plants.
Advanced Micro Devices last week said it would shed 1,100 jobs through layoffs and attrition, and cut salaries of executives to reduce costs.