Motorola to lay off 4,000 more workers
Motorola Inc. said Wednesday it will slice another 4,000 jobs as it battles the worsening economy and its own internal woes, especially its beleaguered phone business.
The communications company started immediately to tell workers they would be among the next group, which includes 3,000 in its Libertyville-based handset business.
The other 1,000 positions will be spread across corporate functions, such as human resources, finance and supply chain, as well as other business units, company spokeswoman Jennifer Erickson said.
"The cost reductions will be global," she said. She declined to say how many would be cut at the Schaumburg headquarters or the Libertyville and Arlington Heights campuses.
An end of an era for the legendary phone maker? Almost, said Alex Dannin, telecom analyst with Chicago-based Morningstar Inc.
"This shows just how bad it is," Dannin said. "The economy being as bad as it is and the worsening losses in the handset business continue. They wouldn't have done these cuts if they felt things would improve."
As Motorola's mobile phone business slips worldwide, the communications company is struggling to reduce its bleeding bottom line.
These work-force reductions and other cuts, such as its announcement Dec. 17 to cut 401(k) contributions and pension funds, are expected to save an additional $700 million this year.
Wednesday's actions, together with the $800 million of savings from other actions announced during the fourth quarter, are expected to result in about $1.5 billion for the company in 2009, Erickson said.
Besides the targeted savings, Motorola plans to issue its fourth-quarter and full-year earnings report Feb. 3.
The company said preliminary results for sales in the fourth quarter are expected to be $7 billion to $7.2 billion. Sales were about $7.5 billion in the previous quarter, when it said it would then cut 3,000 workers companywide.
Also last quarter, the company posted a $397 million loss. This time, Motorola did not indicate what its fourth-quarter net loss could be.
Before Wednesday's announcement, Motorola employed about 61,000 workers, compared to about 147,000 workers in 2000. It has continued to slice away ever since because of internal problems, stiffer global competition and a worsening economy.
Service providers are not spending as much, and consumers are not buying as much, either, which all cuts into Motorola's sales and profits, said David Weissman, senior telecom analyst with Zacks Investment Research.
"There's not much else they can do to weather this storm," Weissman said. "It's a tough market now, and the Motorola management is taking the right steps."
Jobs: Additional 1,000 cuts spread across corporate functions