Technology giant Texas Instruments on Nov. 14 announced plans to eliminate 1,700 jobs worldwide as the company seeks to reduce costs and focus investments in its wireless business on other markets, such as home appliances and cars, that offer greater potential for growth. The 1,700 jobs represent roughly 5 percent of the company's workforce of 35,000.
TI had previously outlined intentions to focus its Open Multimedia Applications Platform (OMAP) processors and wireless connectivity solutions on a broader set of embedded applications with long life cycles, instead of its historical focus on the mobile market, where large customers are increasingly developing their own custom chips. TI is looking to focus on more profitable sectors for its chips than the mobile market, where competitors like Samsung and Apple have replaced TI chips with their own designs.
"We have a great opportunity to reshape our OMAP processor and wireless connectivity product lines to concentrate on embedded markets. Momentum is already building with new embedded applications and a broad set of customers, and we are accelerating our efforts in these areas," Greg Delagi, TI's senior vice president of embedded processing, said in a statement. "These job reductions are something we do with a heavy heart because they impact people we care deeply about. We will work closely with all employees affected by these changes to provide a range of assistance related to compensation, benefits and job search."
As a result of these actions, TI said it expects annualized savings of about $450 million by the end of 2013. Total charges will be about $325 million, most of which will be accounted for in the current quarter, a company statement said. TI's fourth-quarter outlook, published Oct. 22, did not take into account the restructuring charges. The company said the announced change in strategy would require fewer resources and less investment.
"This year, the Kindle [tablet] runs on the OMAP 4 and next year's Kindle is slated, we believe, for OMAP 5. We believe that program is well along to completion and do not expect that the termination of OMAP will disrupt those plans," Longbow Research analyst JoAnne Feeney told Reuters.
Earlier this week, TI, together with six other system-on-module (SoM) vendors, introduced the OMAP 5 processor-based modules designed to simplify and speed industrial development. Based on a dual-core ARM Cortex-A15 architecture complemented by dual Cortex-M4 cores and various on-chip accelerators, TI's OMAP 5 platform supports next-generation industrial applications such as point-of-service, portable data terminals and more. The overall OMAP family consists of three product groups classified by performance and intended application, including high-performance applications processors, basic multimedia applications processors and integrated modem and applications processors.