Motorola to cut 4,000 jobs

US handset maker plans second round of job cuts in a bid to save $1.5 billion

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By  Roger Field Published  January 15, 2009

Motorola is planning to cut 4000 jobs as it seeks to reap cost savings of up to $1.5 billion in 2009. The job cuts, which are expected to begin immediately, are in addition to the 3000 job losses announced in October.

Motorola expects to save about $700 million from the two rounds of job cuts, in addition to savings of some $800 million from “actions announced during the fourth quarter of 2008”, giving a total saving of $1.5 billion in 2009.

About 3000 of the new round of job cuts will be from Motorola’s troubled handset division, with the remainder coming from other business units.

Sales of Motorola’s handsets have plummeted in the past year, as falling consumer spending hit sales, particularly in its home market. Motorola’s Mobile Devices division shipped about 19 million units during the fourth quarter of 2008, compared with almost 41 million units during the same period a year ago, the company said.

“The actions we are taking today in our mobile devices business will allow us to further reduce our cost structure and positions us for improved financial performance in 2009,” said Sanjay Jha, co-chief executive officer of Motorola.

Motorola expects total sales of between $7 billion to $7.2 billion for the fourth quarter of 2008, with a net operating loss of between 7 cents to 8 cents per share.

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