Motorola announces 4,000 more layoffs

Motorola plans to lay off another 4,000 employees, mostly from its Mobile Device business.

Motorola plans to lay off another 4,000 employees, mostly from its Mobile Device business, and to report revenue for the fourth quarter of 2008 that would fall short of analysts' current estimates.

The workforce cuts at the troubled handset, networking and enterprise wireless company will come in addition to the 3,000 layoffs announced during last year's final quarter. Motorola, once the world's second-largest cell-phone maker, has been struggling since its Razr handset faded from popularity.

About 3,000 of the jobs will be cut from the handset business, with the other 1,000 coming from corporate functions and other business units, Motorola said Wednesday. The cuts will slash Motorola's annual costs by an additional US$700 million in 2009. Along with the earlier announced layoffs and some other cost-cutting steps, the company said it will realize savings of $1.5 billion this year.

Also on Wednesday, Motorola issued preliminary results for last year's fourth quarter. The company expects to report revenue in the range of US$7 billion to $7.2 billion, well below a consensus estimate by analysts of $7.5 billion, according to Thomson Financial. It expects a net loss from continuing operations of $0.07 or $0.08 per share. About $0.06 per share of that loss will be from special items, including reorganization costs and writedowns of assets, including the company's investment in WiMax provider Clearwire.

Motorola is still closing its books on the quarter for a Feb. 3 announcement of the results, and the loss could be greater yet, the company said. Charges for the just-announced cost reduction steps will be taken in 2009, it said.

The Mobile Devices business shipped about 19 million units in the quarter, with continued weakness in consumer demand taking a toll, Motorola said. However, the Enterprise Mobility Solutions group and Home and Networks business performed very well, the company said. Motorola ended the year with about US$7.4 billion in cash.

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Stephen Lawson

IDG News Service
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