Chipmaker Texas Instruments said Wednesday that it will lay off 1,700 workers in an effort to shift focus away from its struggling mobile business.
The job cuts represent about 5% of TI's staff, and they are part of a previously announced restructuring initiative aimed at cutting costs and increasing its presence in the burgeoning embedded device market. Shares of Texas Instruments ( rose about 1% in afterhours trading. )
The Dallas-based company had made some headway in the smartphone market a few years ago. But recently the biggest mobile phone makers, including Samsung and Apple ( have opted to design their own chips for their respective Galaxy smartphones and iPhones. )
Other mobile processor competitors, including Samsung, Qualcomm ( and )Nvidia ( have also had better success in the smartphone business. Even )Intel ( has made strides, signing recent deal with )Motorola ( to put its new mobile chips in future Motorola smartphones. )
TI says it's time to reconsider its strategy, opting instead to embrace what many industry experts believe is the future of the mobile sector: embedded connectivity in everyday items, including appliances, cars and even clothing.
"We have a great opportunity to reshape our [mobile] processor and wireless connectivity product lines to concentrate on embedded markets," said Greg Delagi, head of TI's embedded processing division, in a statement. "These job reductions are something we do with a heavy heart because they impact people we care deeply about."
TI said it expects to be able to save $450 million by the end of 2013 by making the cuts. The company said the layoffs will cost $325 million, most of which will be realized in the current quarter.