Texas Instruments cuts 3,400 jobs

US chip manufacturer Texas Instruments has announced 3,400 job cuts, as fourth quarter profits dropped 86 per cent.

During 2008, mobile handset shipments decreased worldwide, resulting in shrinking wireless chipset revenues for the likes of TI.

The firm recorded fourth quarter income of $107m, while revenues dropped 30 per cent year on year to $2.5bn.

“We are realigning our expenses with a global economy that continues to weaken,” said Rich Templeton, TI chairman, president and chief executive officer. “By reducing expenses now, we keep TI financially strong and able to invest for future growth.”

TI will reduce its workforce by 12 per cent through 1800 layoffs and 1600 voluntary redundancies.

“Most of the reductions will come in our internal support functions and non-core product lines so that a greater percentage of the dollars we spend will go directly toward developing and supporting Analog and Embedded Processing products,” said Templeton.

Charges from the cutbacks are estimated to be about $300m, with annualised savings from these reductions to be about $700m by the third quarter of 2009.

“We are not counting on a near-term economic rebound for improvement. The actions we are taking to reduce expenses and inventory will position TI to deliver solid financial results, even in a period of prolonged economic weakness,” said Templeton.