Texas Instruments is axing 3,400 staff after posting an annual 30% decrease in sales and a 95% fall in operating profits for its fourth quarter.
"TI is making reductions in employment because demand has continued to weaken with the slowing economy. Employment will be reduced by 12% through 1,800 layoffs and 1,600 voluntary retirements and departures," said Texas Instruments.
It said the cuts would cost the firm about $300m. Annualised savings from these reductions, plus those announced in October from the restructuring of its wireless business, will be about $700m, after all reductions are complete in the third quarter of 2009.
"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.
"Most of the reductions will come in our internal support functions and non-core product lines, so that a greater percentage of the dollars we spend will go directly toward developing and supporting analog and embedded processing products. We believe these are the areas that will drive TI's future growth and allow us to achieve our financial objectives."
He said the firm was not "counting on a near-term economic rebound for improvement".