Motorola to cut 3,500 jobs after 4Q profit falls 48 percent

Friday, January 19th 2007, 10:07 am

By: News On 6

CHICAGO (AP) _ Motorola Inc. CEO Ed Zander said Friday the cell-phone maker will cut 3,500 jobs, or about 5 percent of its work force, as it moves to improve operating costs after a worse-than-expected fourth quarter.

Zander, speaking to analysts at a meeting in New York, said the move will save the company about $400 million over two years. The job cuts are to be completed by mid-2007.

Motorola has about 67,000 employees worldwide.

The announcement came after the world's No. 2 handset manufacturer reported that fourth-quarter profits fell 48 percent despite record sales as operating results stumbled during the key holiday selling season.

The Schaumburg, Ill.-based company had warned two weeks ago that results would come in well below expectations after a decline in its operating profitability.

Zander said a variety of factors, including missed forecasts, had resulted in a disappointing quarter despite strong sales. He said Motorola is sticking with its strategy, which many analysts had said was in need of overhaul following the company's Jan. 5 profit warning.

``There's no change in strategy,'' he told analysts at the meeting, which was broadcast over the Internet. ``There may be some changes in tactics.''

He also dismissed suggestions that the trend-setting Razr phone, which turned around the company's fortunes two years ago, is running out of momentum.

``It's funny, I keep reading about Razrs being tired,'' he told analysts on an earlier conference call. ``We sold more Razrs in quarter four than in any quarter we ever had. We now have sold over 75 million Razrs worldwide.''

Motorola shares gained 31 cents to $19.02 in morning trading on the New York Stock Exchange. The stock began the session down 9 percent this year after a 9 percent decline in 2006.