TI confirms layoffs to cut costs

April 17, 2001 – Dallas, TX – Texas Instruments announced today it would lay off about 2,500, or 6%, of its worldwide work force.

“We are in one of the sharpest decelerations that our industry has experienced, and it requires that we move fast to make hard but prudent business decisions. The most difficult decisions are layoffs, because they affect our people,” said Tom Engibous, TI chairman, president and CEO. “Despite the short-term market conditions, the long-term megatrends in society continue to move toward a networked world of high-speed communications that depend on the real-time capabilities of DSP and Analog semiconductors. The economy will get better. As it does, TI will emerge an even stronger competitor.”

First-quarter financial results for Texas Instruments Incorporated were impacted by a combination of weak electronic end-equipment demand and excess customer inventories, resulting in reduced demand for its semiconductor products. TI’s revenue in the quarter was $2528 million, down 17 percent sequentially. Pro forma earnings per share (EPS) were $0.18.

Early in the first quarter, TI began an aggressive cost-reduction plan to limit the impact of reduced revenue on profitability. Actions have included a voluntary retirement program, shortened workweeks in some areas, and consolidation of certain manufacturing operations. Overhead costs were significantly reduced, maintaining pro forma SG&A (selling, general and administrative) expenses at the same percentage of revenue as in the fourth quarter.

To further align the company’s expenses with near-term revenue expectations, TI will make the layoffs, as well. These reductions will begin in the second quarter and the company will take associated special charges at that time. Most of these job eliminations are in support functions and manufacturing. In total, these actions are expected to result in annualized savings of approximately $400 million when completed.


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