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updated: 10/23/2013 1:13 PM

Motorola Solutions hurt by government shutdown

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  • Motorola Solutions in Schaumburg.

       Motorola Solutions in Schaumburg.
    Bill Zars | Staff Photographer

  • Greg Brown

      Greg Brown

 
 

Motorola Solutions said Wednesday its third-quarter sales and earnings dropped, so it will continue to seek voluntary buyouts of middle managers in U.S. offices, including at its Schaumburg headquarters. But its chief executive said the company has no current plans for a general workforce layoff.

The maker of equipment for government agencies and businesses also said it took a "sharp hit" in the third quarter when the federal government shut down temporarily.

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Cost-cutting measures, including the buyouts, will be ongoing, said CEO Greg Brown.

"We expect a few hundred in the buyout, but we don't have a target figure," Brown said. "And it's too early to tell how many will accept the buyouts. ... If it's 150 or 350, that number won't dictate anything in the future. We have no plans now for layoffs."

Motorola Solutions posted its third-quarter earnings with $2.11 billion in revenue, down 2 percent, compared to $2.15 billion in the same period a year ago. Yet, it posted $307 million in net earnings, compared to $206 million a year ago. Its sharpest decline came in its government sector, where sales were $1.5 billion, down 4 percent from the year-ago quarter.

"The third quarter is usually our strongest, because it went along with the government's fiscal close," Brown said. "But that didn't happen this time."

One of Motorola Solutions' largest clients is the federal government, which shut down for 16 days due to an impasse on its budget approval.

In other matters, Brown said there are no plans to sell more real estate on the Schaumburg campus.

Motorola Solutions said in September it had agreed to allow Zurich Insurance to construct a new headquarters for its 2,500 workers on roughly 30 acres to 40 acres on its Schaumburg campus. That would include razing the former Motorola Parts Building, which had been on the market for a while.

Motorola Solutions intended to change the face of its campus in February 2011, when it put the Parts Building and the IT Building on the market for sale or lease. The remaining IT building is still available, Brown said.

In addition, the company continues with plans to move about 400 workers at its Michigan Avenue office in downtown Chicago. At the same time, it is outsourcing work that had been at a manufacturing plant in China, Brown said.

Despite the cutbacks, Motorola Solutions continues to hire in key growth areas. Those jobs include sales in the United States, including locally, as well as worldwide, Brown said.

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