The Dallas-based chipmaker said Monday it would cut 3,400 jobs -- 12% of its workforce -- as the company offered a bleak first-quarter forecast on the heels of posting an 86% decline in fourth-quarter profit.
"We are realigning our expenses with a global economy that continues to weaken," said Rich Templeton, TI chairman, president and chief executive officer. "By reducing expenses now, we keep TI financially strong and able to invest for future growth."
The headcount reduction will elicit a $300 million charge, but the company said the move, along with a plan announced in October to streamline the company's wireless business, will bring annualized savings of $700 million by the third quarter of 2009.
TI said fourth-quarter profit fell to $107 million, or 8 cents a share, from $756 million, or 54 cents a share.
Excluding restructuring charges, the company earned 21 cents a share, exceeding its midquarter forecast given in December that called for a profit of 10 cents to 16 cents a share.
Revenue fell 30% to $2.49 billion, which beating analysts' consensus projection of $2.37 billion, but highlighted the rapid slowdown in demand, as the company's revenue had fallen only 8% year over year in the third quarter.
Shares of TI, which fell 1.5% in Monday's regular trading session, were up 4.3% in after-hours trading to $15.40 -- further indication that investors are preferring their dour forecasts with a round of firings.
For the first quarter, the company said it was expecting a wide EPS range that was anywhere from a loss off 11 cents to a profit of 3 cents. The midpoint of the forecast, a 4-cent loss, was below analysts' consensus forecast of a 4-cent-a-share profit.
TI expects first-quarter revenue of $1.62 billion to $2.12 billion. Analysts had expected the company to post a top line of $2.09 billion, on average.
Monday saw multi-thousand layoffs from several major companies, including