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TI shifts strategy away from smartphones, change will cost 1,700 jobs

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Texas Instruments intends to slash 1,700 jobs worldwide as it shifts it focus away from smartphones and tablet computers and instead targets the embedded systems market, which the company estimates is worth $18 billion.

In September TI outlined its intentions to focus its OMAP processors and wireless connectivity solutions on a broader set of embedded applications with longer life cycles. The company has faced increasing competition from companies like Qualcomm (NASDAQ:QCOM) and has also lost ground to smartphone makers such as Apple (NASDAQ:AAPL) and Samsung, which have been developing their own chips.

"We have a great opportunity to reshape our OMAP processor and wireless connectivity product lines to concentrate on embedded markets. Momentum is already building with new embedded applications and a broad set of customers, and we are accelerating our efforts in these areas," said Greg Delagi, senior vice president of TI's embedded processing unit.

EE Times reported that analysts such as Will Strauss of Forward Concepts have said TI fell behind in integrating the applications processor and baseband processor in smartphones, largely because the vendor began phasing out its baseband technology years ago.

TI's shift in focus will put the company in the running with Freescale, another chipmaker that moved away from smartphones three years ago.

The 1,700 jobs being cut represent almost 5 percent of TI's workforce, said the Associated Press, which noted TI had 34,759 employees at the end of 2011.

TI said the layoffs and change in focus will result in annualized savings of about $450 million by the end of 2013. Total charges will be about $325 million, most of which will be accounted for in the current quarter. TI's fourth-quarter outlook, published on Oct. 22, did not comprehend these restructuring charges.

For more:
- see this TI release
- see this EE Times article
- see this Associated Press article

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