Texas Instruments signaled its intentions to back away from the volatile mobile market as the summer came to a close. Unfortunately, we're now learning that the shift comes at a price -- as part of a wider set of cost-cutting measures, TI is shedding roughly 1,700 jobs worldwide. The chip designer hasn't said how soon the layoffs take effect, but these and the overall budget trimming should lead to savings of about $450 million per year by the end of 2013. That's not going to be reassuring to those who'll soon find themselves looking for work, although it may be necessary for TI to survive when the market for off-the-shelf mobile processors is rapidly thinning out.
TI to reduce costs in Wireless business; OMAP™ processors and wireless connectivity solutions will focus on embedded markets
Nov 14, 2012
DALLAS, Nov. 14, 2012 /PRNewswire/ -- Consistent with previously stated strategic plans, Texas Instruments (TI) (NASDAQ: TXN) announced today it will reduce costs and focus investments in its Wireless business on embedded markets with greater potential for sustainable growth. Cost reductions include the elimination of about 1,700 jobs worldwide.
TI previously outlined intentions to focus its OMAP processors and wireless connectivity solutions on a broader set of embedded applications with long life cycles, instead of its historical focus on the mobile market where large customers are increasingly developing their own custom chips. These changes require fewer resources and less investment.
"We have a great opportunity to reshape our OMAP processor and wireless connectivity product lines to concentrate on embedded markets. Momentum is already building with new embedded applications and a broad set of customers, and we are accelerating our efforts in these areas," said Greg Delagi, senior vice president of Embedded Processing. "These job reductions are something we do with a heavy heart because they impact people we care deeply about. We will work closely with all employees affected by these changes to provide a range of assistance related to compensation, benefits and job search."
As a result of these actions, the company expects annualized savings of about $450 million by the end of 2013. Total charges will be about $325 million, most of which will be accounted for in the current quarter. TI's fourth-quarter outlook, published on October 22, did not comprehend these restructuring charges.