Texas Instruments to cut 1,100 jobs worldwide
SAN FRANCISCO (Reuters) - Texas Instruments Inc (TXN.O) plans to cut 1,100 jobs in the United States, Japan and India, or about 3 percent of its global workforce, in a corporate restructuring to save $130 million by the end of 2014.
The U.S. chipmaker, which in 2012 announced it would lay off 1,700 people as it wound down its mobile processor business, said on Tuesday it wanted to reduce expenses in its embedded-processing division and in Japan.
"Technology markets mature from time to time and you have to rebalance where you spend your money," Chief Financial Officer Kevin March said in an interview. "In the case of Japan, the size of the market there has been declining for a number of years."
While TI is better known to many consumers for its calculators, the Dallas-based company is regarded as a barometer of the chip industry because it makes components for a variety of markets, including industrial, automotive, consumer electronics and communications.
Demand for TI chips has gradually improved in recent months although many on Wall Street have been watching for a larger pickup, including an elusive buildup in inventories by manufacturing customers.
March said most of TI's customers have kept their inventories "extremely lean," largely because TI in recent years has increased its own store of available components so that it can fill new orders quickly.
Job cuts to TI's embedded business are centered mostly on products that have seen slow growth, he said. The job cuts in Japan will include sales and customer support.
TI took a $49 million charge in the fourth quarter, to be followed by about $30 million in the first.
"This to me shows they believe there are some more efficient ways to run the business than they were running it," RBC analyst Doug Freedman said of the chipmaker's job cuts.
TI is the second major chipmaker in the past week to announce layoffs.
Intel Corp (INTC.O) said on Friday it plans to reduce its global workforce of 107,000 by about 5 percent this year as the chipmaker, struggling with falling personal-computer sales, shifts focus to faster-growing areas.
TI, which has gradually withdrawn from an intensely competitive mobile phone arena to focus on supplying chips for more lucrative markets like cars and communications, posted fourth-quarter revenue on Tuesday that was up 2 percent from the year-ago period, above expectations.
TI reported fourth-quarter net income of $511 million, or 46 cents a share. The $49 million charge reduced earnings by 3 cents a share due to the restructuring.
In the year-ago quarter, TI had net income of $264 million, or 23 cents.
Revenue rose to $3.03 billion in the fourth quarter - a little higher than expected - from $2.98 billion in the year-ago quarter. TI estimated first-quarter revenue of $2.83 billion to $3.07 billion.
Analysts on average had predicted $2.987 billion in revenue for the fourth quarter and $2.95 billion for the first quarter, according to Thomson Reuters I/B/E/S.
It said it expects EPS in the first quarter of 36 cents to 44 cents.
On a conference call with analysts, TI said it will stop providing mid-quarter updates to its outlook because its business increasingly reflects broad trends instead of changes caused by major customers.
Shares of TI fell 1.59 percent in extended trade after closing up 0.92 percent at $43.85 on Nasdaq.
(Editing by Richard Chang) nL2N0KV1RM
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