That translates into a loss of about 5% of the company’s total payroll and will lower annual costs by about $450 million by the end of next year, Reuters noted.
Analysts had thought the company might attempt to sell its mobile chip business, possibly to Amazon (NASDAQ:AMZN), which has made a strong commitment to its Kindle tablet business. However, Texas Instruments will simply restructure operations away from the mobile sector. The restructuring will result in a charge of about $325 million, mostly taken during the current quarter.
Texas Instruments will continue to provide its existing range of mobile chips to Amazon and other purchasers, but will not develop new mobile processors.
The mobile processing market is extremely competitive. Leading smartphone and tablet makers like Apple (NASDAQ:AAPL) and Samsung now design their own chips. Texas Instruments has also ceded market share to Qualcomm (NASDAQ:QCOM).
Shares of Texas Instruments gained fractionally in Thursday morning trading.
A number of other companies have recently announced plans to shed workers, including:
- Panasonic (NYSE:PC) — 10,000 workers by the end of March.
- Colgate-Palmolive (NYSE:CL) — 2,300 jobs over the next four years.
- UBS (NYSE:UBS) — 10,000 workers over the next three to five years.
- Martha Stewart Living Omnimedia (NYSE:MSO) will layoff about 12% of its workforce.
- Comcast‘s (NASDAQ:CMCSA) NBCUniversal will eliminate 450 jobs across its operating divisions.