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Texas Instruments to cut 1,100 jobs despite profit growth

Will slash three percent of global workforce as revenues increase by two percent
Wed Jan 22 2014, 12:22
Texas Instruments

CHIPMAKER Texas Instruments (TI) will cut over a thousand jobs across its global workforce, despite solid profit growth.

The jobs cull will see the cuts in over 1,100 positions in the United States, Japan and India, or about three percent of its global workforce.

The cuts, most of which are expected to be in Embedded Processing and in Japan, could save the company $130m by the end of 2014. However, TI made the announcement as its fourth quarter earnings report showed a two percent increase in revenue from 2012 to $3.03bn

The firm also boasted an increase in net profit of 94 percent from the prior year to $511m, as the company saw strong growth in several areas.

TI CEO Richard Templeton did not comment on the planned job cuts and instead focused on the strong financials as evidence that the company's focus on analogue and embedded processing markets ranging from GPS systems, video security cameras and power tools was paying off.

"Our fourth quarter capped a year in which each quarter's performance increasingly reflected the impact of structural changes we've made to focus Texas Instruments on analogue and embedded processing, where the diversity and longevity of our positions are assets," he said.

"The combined revenue from analogue and embedded processing grew 12 percent over last year's fourth quarter and comprised 82 percent of total revenue. Individually, analogue was up 12 percent and Embedded Processing was up 11 percent from a year ago."

TI VP of investor relations Ron Slaymaker said that cuts in Japan will ensure further growth.

"On one hand, we'll be consolidating some of the business activity that was previously in Japan just to other regions of the world where we can do it more efficiently," he said on an earnings call.

"But then also we'll be affecting some of the sales and marketing activities in Japan, kind of align those resources with that opportunity that we see in Japan going forward."

TI's job reduction follows a similar announcement from rival chipmaker Intel earlier this week that said Intel will slash its global workforce of 107,000 by about five percent, meaning that the company will cut about 5,300 jobs.

Intel's announcement followed a disappointing earnings report a week earlier that showed a dip in revenues for 2013. µ

 

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