Tech company Texas Instruments has announced that it is shedding away 1,700 jobs to save costs following a stategic move to stop making smartphone application chips. The lost jobs amount to about 5 percent of the company’s global workforce. The company’s shares rose one percent following the announcement.
A few months back, the Dallas, Texas-based company revealed that it would stop investing in the expensive OMAP mobile application business that are being used for features like video in smartphones and tablets.
Texas Instruments had been feeling the pressure from rivals and dwindling demand for its chips recently. Chipmaker Qualcomm Inc has overtaken TI in terms of sales, while former customers like Samsung Electronics Inc and Apple Inc have shifted strategies by making their own chips instead of buying them from firms like TI.
TI decided not to pour out resources in developing technology for the phone market. Instead, it focused on selling OMAP in a wider niche, which means less investments and a bigger market as it includes industrial firms like carmakers.
TI expects the total costs related to the recent job cust and other cost reduction measures will be about $325 million, which most of them to be accounted for the current quarter. The company initially revealed its financial target without considering the cost reduction costs.
TI has 35,000 workers arouind the world. It expects to save around $450 million every year after 2013 following the cutting of 1,700 jobs.