Motorola cuts 7,000 more jobs

Tuesday, March 13th 2001, 12:00 am
By: News On 6

CHICAGO (AP) _ Motorola Inc. is cutting 7,000 more jobs in its cellular phone division, increasing to 12,000 the number it has eliminated in the operation since December.

The reductions to its global work force of more than 130,000 will take place over the next two quarters, the Schaumburg, Ill.-based company announced Tuesday.

Motorola, the world's No. 2 cellphone manufacturer behind Nokia, has been slashing costs in an effort to combat falling sales and profits.

Last month, Motorola also announced it was eliminating 4,000 jobs from its semiconductor business.

``Unfortunately, this was a necessary next step for us to achieve renewal and stay competitive in today's dramatic business environment, particularly given the current slowdown in the economy,'' said Mike Zafirovski, president of Motorola's personal communications division, which makes cellphones, pagers and other wireless devices.

``We are committed to becoming the most cost-competitive enterprise in the industry in order to help grow our market share. We anticipate growth, but at a slower pace.''

After losing the No. 1 spot in the world cellphone market to Finland's Nokia only two and a half years ago, Motorola's share in the fourth quarter of 2000 had sunk to 13 percent compared with 34 percent for Nokia, according to the Gartner Dataquest research firm.

The slowdown of the economy has worsened troubles that already were evident in the second half of last year, when Motorola struggled with profit margins despite the then-runaway growth in the cellphone market.

The company missed the switch in consumer preference to lower-cost phones and was left with a complicated manufacturing platform and much higher costs than those of its competitors.

Motorola did not announce a breakdown of where the latest job cuts will occur, except to say they will occur ``across all geographies.''

It eliminated 2,500 jobs at its cellphone manufacturing facility in Harvard, Ill., in January, a month after disclosing 2,870 layoffs in Iowa, Florida and Ireland as part of a moneysaving shift to more outsourcing. It also makes cellphones at plants in Florida, Europe, Asia and elsewhere.