Leading cell phone chip manufacturer, Texas Instruments announced its Q4 results reporting a 95 percent drop in its profits at $51 million while revenues too dropped 30 percent y-o-y to $ 2.49 billion.

While the company posted results which are considered reasonable considering the prevailing market conditions, the company expects major challenges in the current quarter and hence is proactively bracing itself to cope with the situation.

It will now slash 3400 jobs with 1800 to be through layoffs and 1600 through voluntary retirements and departures. Combined with the earlier announced 650 job cuts on October, the company expects to save $ 700 million.

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

The job cuts will mainly be in the support functions and non-core product lines. The company now aims to focus totally on developing and supporting analog as well as embedded processing units. "The actions we are taking to reduce expenses and inventory will position TI to deliver solid financial results, even in a period of prolonged economic weakness. When the economy strengthens, we''ll be pleased that we focused aggressively on our core product lines,”  added Templeton.

The company's shares rose 55 cents, or 3.7 percent, to $15.32.