Motorola revamp costs 42,900 jobs, saves $865 M in 02

Tue, 12/18/2001 - 7:00pm
Anne Kerven

Motorola Inc.'s streamlining plan promises to save $865 million next year but also entails cutting more than 42,000 jobs from its 150,000- person workforce that existed in August 2000. The company is notifying about 9,400 employees their jobs will end within a year.

Most cuts will come from the semiconductor products unit, which has manufacturing plants that will be phased out during the next year as part of Motorola's "asset light" business model, it says. The closure also means cutting 4,000 jobs.

Companywide, Motorola has already notified another 4,100 workers that their jobs will end, and expects to lay off another 1,300 in its equipment manufacturing businesses.

Since August of 2000, when Motorola employed 150,000 worldwide, sales of various businesses and facilities transferred about 5,500 jobs to new owners. The company also had previously announced it would eliminate 33,500 positions.

The cuts are part of Motorola's plan to save $865 million in 2002 and another $1.1 billion a year after that. Chair and CEO Christopher B. Galvin cites an "extraordinary boom-severe decline technology cycle" and a soft global economy for the streamlining.

"Personally, I sincerely regret the impact on the Motorola associates affected by these actions, but these initiatives, when coupled with the energy of all ongoing Motorola associates globally and the … leadership team will result in a leaner, more flexible and more profitable company in a global environment less predictable than in past eras," he says in a statement.

Separately, Motorola affirmed its guidance that Q4 sales for ongoing operations should be flat to 3 percent higher than Q3. It also expects a pro-forma operating loss of 4 cents to 5 cents a share.

Poor results from the Global Telecom Solutions and Broadband Communications units will be offset by higher than expected results from the Commercial, Government and Industrial Systems divisions, and from its wireless unit.


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