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.
