Motorola Cuts More Jobs
Friday, March 23rd 2001, 12:00 am
By: News On 6
SCHAUMBURG, Ill. â€“ Motorola Inc. today announced it is cutting 4,000 more jobs, or about 3.1 percent of its work force, bringing the total eliminated companywide since December to 22,000.
The latest cuts are in Motorola's networks sector, which was created in January to provide broadband and wireless communications products and systems.
"Motorola is making tough but deliberate and strategic business decisions in order to remain competitive in the slowing economy,'' Edward D. Breen, president of Motorola's Networks Sector, said in a statement.
"Unfortunately, reductions have been necessary for us to improve financial performance, and this is something that we will have to continually evaluate as we monitor market and economic conditions,'' Breen said.
Motorola's stock was up 12 cents to $15.80 in early trading on the New York Stock Exchange. Its 52-week high is $56.25.
The latest job cuts at Motorola, the world's No. 2 mobile phone maker behind Finland's Nokia, come a day after consumer product giant Procter & Gamble Co. disclosed plans to cut about 9,600 jobs worldwide, or about 9 percent of its work force.
Other large corporations such as DaimlerChrysler AG, Compaq Computer Corp. and Lucent Technologies have also announced big job cuts recently as the economy has slowed.
The Motorola cuts will come mostly from two businesses in its networks sector: the Commercial, Government and Industrial Solutions Sector; and the Global Telecommunications Solutions Sector. The Broadband Communications Sector will be impacted to a lesser degree.
"Motorola really looks like it doesn't run as efficiently as some of its competitors, and they're finally taking real steps to addressing that,'' said Paul Sagawa, a senior research analyst at Sanford C. Bernstein and Co.
Although the job cuts would probably be more tolerable if made over a longer period of time, Sagawa said, the company had few other options to right its ship.
"They can't grow their way out of it. Not in this economy,'' he said.
The reduction will leave Motorola with about 125,000 employees worldwide, and will either be completed or communicated to affected employees by the end of the second quarter, the company said.
Last week, Schaumburg-based Motorola slashed 7,000 jobs from its cellular phone division. Motorola had 147,000 employees when the company, intent on cutting costs as its sales and profits started to fall, began handing out pink slips in December.