Texas Instruments to cut 1,700 jobs to reduce costs
NEW YORK (Reuters) - Texas Instruments is eliminating 1,700 jobs or almost 5 percent of its global workforce to cut costs in its wireless business as it moves away from making smartphone application chips, sending its shares up almost one percent in late trade.
The Dallas, Texas based chipmaker had said in September that it would halt costly investments in its OMAP mobile application chip business, which supports features like video, for tablet computers and smartphones.
TI has been under pressure in wireless, where it has lost ground to rival Qualcomm Inc and the world's biggest smartphone makers Apple Inc and Samsung Electronics Co Ltd who have been developing their own chips instead of buying them from a supplier like TI.
Instead of pursuing the phone market TI is trying to sell OMAP in a broader market that requires less investments and includes industrial clients like carmakers.
TI said on it expects to take charges of about $325 million related to the job cuts and other cost reduction measures, most of which will be accounted for in the current quarter. Its previously announced financial targets for the fourth quarter do not include these costs, TI said.
The company, which has 35,000 employees around the world, expects annualized savings of about $450 million by the end of 2013 from the action.
TI shares rose to $29 in late trade after closing down 2 percent at $28.76 in the regular Nasdaq session.
(Reporting By Sinead Carew)