Wed, Jan 28, 2009 - Page 5 News List

TI, GM and IBM planning to cut jobs

FALLING DEMAND Texas Instruments and General Motors cited poor profits as the reason, while IBM, which posted sound earnings last year, has yet to confirm reports


Dragged down by a weak economy, Texas Instruments (TI) and General Motors (GM) on Monday announced plans to cut their work force, while IBM may be mulling the same move.

Texas Instruments Inc said it was cutting 12 percent of its global work force, or about 3,400 jobs, as profits fell amid a global slump.

The Dallas, Texas-based electronics and semiconductor manufacturer said the reductions would come through 1,800 layoffs and 1,600 voluntary retirements and departures and would result in charges of about US$300 million.

Combined with a restructuring of the company’s wireless business announced in October, the reductions would result in annualized savings of US$700 million, it said.

“We are realigning our expenses with a global economy that continues to weaken,” chief executive Rich Templeton said. “By reducing expenses now, we keep TI financially strong and able to invest for future growth.

“We are not counting on a near-term economic rebound for improvement,” he said in statement.

Texas Instruments said net profit fell 27 percent to US$1.92 billion last year compared with the previous year.

In the fourth quarter, net profit fell 86 percent to US$107 million, dragged down by US$254 million in restructuring costs.

“As the year progressed and the global economy weakened, the decline in TI revenue accelerated and broadened to the extent that all segments declined from the year-ago quarter in the final quarter of the year,” the company said.

Texas Instruments forecast revenue of between US$1.62 billion and US$2.12 billion in the current quarter, down from US$2.49 billion in the fourth quarter.

Meanwhile, GM said it was planning to cut 2,000 jobs at two US plants as it slashes production in the wake of a sharp drop in demand and amid a deepening recession.

The cuts come as the cash-strapped automaker prepares to submit a long-term viability plan in exchange for obtaining billions in loans from the US government.

GM’s US sales fell 23 percent last year, while total industry sales fell 18 percent in the steepest annual decline in 29 years to levels not seen since 1992.

The largest US automaker slashed production by 21 percent in the fourth quarter of last year and cut its first-quarter production forecast by 53 percent.

“Although we are bringing all our plants in North America back on line in the first quarter, many of those will have additional downtime in the first and second quarter,” GM spokesman Susan Waun said.

The job cuts will come through the elimination of a shift at an Ohio sport utility plant and a Michigan car factory, Waun said.

Nine of the automaker’s 15 US plants and one plant in Canada will face weekly shutdowns, but the breadth of the production cuts has not yet been determined, Waun said.

GM had 62,000 hourly and 29,500 salaried workers at the end of last year.

That is down dramatically from 105,000 hourly and 36,000 salaried workers in 2005, when GM began posting staggering losses which reached US$72 billion through the third quarter of last year.

Separately, US computer and software giant IBM Corp is planning to cut more than 2,800 jobs, a labor union representing the firm’s employees said on Monday.

Alliance@IBM, a member of the AFL-CIO, the largest US labor union federation, said IBM intends to eliminate 1,419 jobs in its software division and 1,449 jobs in sales and distribution.

This story has been viewed 2594 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top