Texas Instruments Inc. yesterday announced third-quarter losses exceeding $82 million and said it plans to lay off more than 2,200 employes worldwide and close several plants as part of a continuing effort to slash costs.
The world's largest semiconductor manufacturer said that it took $63.8 million in writedowns in connection with the layoffs and plant closings, which are a response to the worst recession in the semiconductor industry's history. Those writedowns contributed to the company's third-quarter losses of $3.30 a share versus net profit during the third quarter of last year of $85.8 million or $3.54 a share.
This latest round of layoffs brings total layoffs at Texas Instruments this year to over 7,000 -- roughly 10 percent of its workforce. The company said it would shut its chip assembly and test site in El Salvador and a wafer processing plant in Houston.
In addition, the company said it would streamline operations in its Data Systems group by consolidating four plants into two, and defer wage and salary increases for all employes that would have taken place during the first half of 1986.
Texas Instruments' massive layoffs and losses are the just the latest examples of the red ink that has washed over Silicon Valley and semiconductor companies. Intel Co., Advanced Micro Devices Inc., National Semiconductor Corp. have all recently declared significant losses. Last week, United Technologies Corp. announced it would close the Mostek semiconductor company it had acquired in 1980. Sales throughout the industry have plummeted all this year.
"This certainly reflects the dismal position of the world's semiconductor market at this time," said a Texas Instruments spokesman, adding that without the writedowns, the company's losses would have been only 76 cents a share.
Texas Instruments sales during the first nine months of this year are down more than 12 percent -- with indications that the drop in semiconductor sales has been more than double that. Roughly 45 percent of TI's $5.7 billion in annual revenue comes from semiconductors.
The cutbacks are the first major move by new company chief executive officer Jerry R. Junkins who replaced longtime Texas Instruments executive Fred Bucy in May.
TI stock fell 1 7/8 yesterday to close at 92 5/8 per share on the New York Stock Exchange.