(Adds comments, details from analyst call)
By Noel Randewich
SAN FRANCISCO Jan 21 Texas Instruments Inc
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
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
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
Intel Corp 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TI, which has gradually withdrawn from an intensely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
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
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)