DALLAS-The aggressive cost-cutting plan recently implemented by Texas Instruments Inc. that included a voluntary retirement program, shortened work weeks and manufacturing consolidation, apparently wasn’t enough, as reflected in the company’s first quarter financial results, reported late last Tuesday.
TI’s revenue for first quarter 2001 totaled $25.28 million, down 8 percent from last year and 17 percent sequentially. Pro forma earnings per share were 18 cents.
“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,” said Tom Engibous, TI’s chairman, president and chief executive officer.
According to the company, those business decisions will include laying off approximately 2,500 TI employees, 6 percent of the company’s work force, beginning in the second quarter. The reductions, which will mainly eliminate support functions and manufacturing positions, are expected to save TI approximately $400 million.
Overall for the first quarter, TI’s revenue, pro forma operating profit, pro forma income, pro forma earnings per share and orders were all down from the year-ago quarter and from the fourth quarter of 2000. The company said its outlook for the second quarter is equally grim. TI expects revenue to fall another 20 percent sequentially in the next quarter and added that current economic conditions make it “unclear” when demand for its semiconductor products will be back up.
Despite the bleak outlook, TI’s stocks continued to go up in last Tuesday’s after hours trading and on Wednesday.
