Motorola cuts 7,000 more jobs

Motorola Inc. reaffirmed its full year and second quarter 2002 financial guidance Thursday, but said that it would cut an additional 7,000 jobs as part of an overall restructuring program

The job cuts will affect all business units, the Schaumburg, Illinois, company said, including manufacturing, research and development, sales and corporate headquarters. However, the company’s wireless infrastructure division will suffer the brunt of the layoffs, where some 3,000 jobs will be cut, company officials said in a conference call Thursday. A majority of the layoffs will occur in North America, but Europe and Asia will also be affected, the company said.

Following the job cuts, the company expects to have about 93,000 total employees.

Motorola executives were quick to point out that the layoffs and restructuring were not a reaction to the current economy, but rather part of a longer-term plan put in motion in 2000, when the company boasted some 150,000 employees. At that time, the company decided to reduce its overall breakeven cost structure by more than 20 per cent.

The company said Thursday that it decided to further reduce its breakeven cost, however, resulting in a new round of layoffs. The restructuring is part of what Motorola is calling its “asset-light semiconductor business model.”

In a statement released Thursday, the company said that it wants to take its business back to its mid-1990’s size, prior to the “excesses of the telecom and dot-com booms.”

“We feel like we have the business sized to the market we see over the next 18 months,” Motorola President and Chief Operating Officer (COO) Edward Breen said during the conference call.

Motorola plans to boost its broader base of businesses, including two-way radio products, public safety systems, cellular handsets, mobile communication networks, and embedded semiconductor solutions for wireless communications, the company said.

In addition to detailing the progress of its restructuring efforts, Motorola also reaffirmed the second quarter guidance it released June 12, estimating that sales for the quarter would reach or slightly exceed US$6.4 billion. Operating results for the second quarter will result in a loss of $0.04 a share, the company added, although the company predicted positive operating cash flow for the quarter.

Despite predicting a sales decline of 5 percent to 10 percent for the full year 2002 compared to last year, Motorola estimated that it will post earnings of $0.04 a share for 2002.

“We are in real good shape, we feel, on the financial front,” said Motorola Chief Financial Officer (CFO) David Devonshire during the call Thursday.

Stock in the company (MOT) traded up 2.21 percent to $14.35 Thursday morning.

Motorola is online at

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