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Motorola Cuts 7,000 More Jobs
Motorola Inc. axed 7,000 jobs in its cellular phone division Tuesday, adding to the more than 9,000 positions eliminated companywide since early December.
The world's No. 2 cellphone maker blamed the latest reductions on the cooling economy, which has put a big chill on industrywide sales and left it with a substantial inventory of unsold phones.
With Tuesday's cuts, Motorola has reduced its work force by more than 10 percent as it careens toward the end of what it expects to be its first quarter with an operating loss since 1985.
Analysts, while calling the actions necessary, said Motorola must still rid itself of an old bugaboo -- an inability to connect well with consumers on the lower-cost phones they prefer. Its failure to do so last year while the cellphone market and economy were still booming started its profit woes and caused it to slip further behind Finland's Nokia.
Motorola gave no breakdown of the latest announced cuts but said they will affect manufacturing, engineering and administrative jobs throughout its worldwide cellphone operations. The bulk are to take place by July.
Once they take effect, 12,000 workers in its once high-flying personal communications division will have been idled by the series of cuts. In a related move, Motorola announced Feb. 23 it was eliminating 4,000 jobs from its semiconductor business, which supplies computer chips for its phones.
Motorola launched its latest restructuring late last year, barely two years after cutting 20,000 jobs and taking a $1 billion loss in 1998, the year Nokia overtook it. Its market share was only 13 percent in the fourth quarter of 2000 compared with 34 percent for Nokia, according to the Gartner Dataquest research firm.
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