It isn't exactly a secret that Texas Instruments has been struggling in the mobile space a bit lately, so it shouldn't be much of a surprise that today the company announced it will soon be broadening its focus when it comes to its OMAP processors. We've heard about such a change before, but today Texas Instruments is giving us a better idea of what pros and cons this broader focus will have. While the company will be able to save a healthy amount of money by focusing less on the smartphone space, this unfortunately means that TI will be letting around 1,700 employees go.
In a statement today, the company reiterated plans to "focus its OMAP processors and wireless connectivity solutions on a broader set of embedded applications with long life cycles, instead of its historical focus on the mobile market where large customers are increasingly developing their own custom chips." This is all in an attempt to save money moving forward, and Texas Instruments expects this move to result in annualized savings for $450 million by the end of 2013.
Texas Instruments elected to go this route because making these changes will be less expensive than other options, but the company will still be paying a hefty sum to implement this shift in focus. TI expects the changes to cost a total of $325 million, most of which will be covered in the current quarter's financials. Even though Texas Instruments will have to plop down a lot of cash to make the shift it needs to, it sounds like the company will still come out on top.
It's just a shame to hear that nearly 2,000 employees will have to lose their jobs in order for Texas Instruments to save some money. Hopefully the company's plan works out, because if it doesn't, even more people may be out of a job in the future. Stay tuned.