Texas Instruments Inc. said it will lay off 12 percent of its workforce, or approximately 3,400 employees, as it restructures operations following one of the worst sequential and year-over-year quarterly performances in the history of the analog and digital signal processor company.

Dallas, Texas-based TI also warned that it does not expect sales will improve significantly anytime soon due to continuing weakness in the general economy, which helped drive down fourth quarter revenue 30 percent from the immediately preceding quarter and 26 percent from the comparable quarter of 2007.

Net income in the December quarter plunged 86 percent, to $107 million, or 8 cents per share, from $756 million, or 55 cents per share, in the year-ago quarter. The company said the results included 13 cents per share in restructuring charges.

Excluding the special charges, adjusted earnings per share would have been 21 cents, TI said. Analysts were expecting TI to report adjusted earnings per share of 12 cents.

The extent of the cost-reduction actions being implemented by TI demonstrates how deeply the economic recession is beginning to hurt companies in the electronics industry.

With consumer and corporate demand stalling, most electronic component suppliers are largely working to blind forecasts and have been forced to severely cut production to reduce costs.

In TI's case, the company appears to be aiming most of its costs at non-core businesses and the selling, general and administrative structure.

The outlook for the first quarter appears even bleaker than the fourth quarter performance. TI forecasts first quarter revenue will be in the range of $1.62 billion to $2.12 billion.

The company said it may post a net loss for the first quarter. For 2009, TI expects R&D expenses will be $1.5 billion while capital expenditure will be approximately $300 million.

By: DocMemory
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