Motorola's mobile unit gets slammed in another round of cuts, layoffs
Motorola announced an additional 4,000 layoffs today - on top of the 3,000 announced last month - with the troubled mobile division taking the biggest hit with 3,000 positions eliminated. The reduction will cut save another $700 million, on top of the $800 million estimated savings from the fourth quarter cuts, which included freezing pensions and halting 401k matches.
Of the $1.5 million anticipated savings, about $1.2 million is from the mobile division.
The remaining 1,000 positions are "associated with corporate functions and other business units," the company said in a statement. The cuts are expected to begin immediately. Sanjay Jha, who was named the new CEO of the company’s mobile devices business last summer, said in a statement:
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. Together with these actions and the announcements made in the fourth quarter, the Mobile Devices business expects to recognize annual cost savings of approximately $1.2 billion in 2009.
In October, Motorola said it would delay the spin-off of its reeling handset unit and cut workers. The handset business is a sick business that is bringing Motorola’s other units down. Samsung unseated Motorola from its throne as the leading mobile phone vendor in the U.S. in the third quarter of last year. Samsung led with 22.4 percent of mobile phones in the U.S. while Motorola carried 21.1 percent, down from 32.7 percent in Q3 of 2007. Nokia held its global lead.
Separately, the company also issued preliminary results for the fourth quarter, noting that sales were "adversely impacted by continued weakness in end consumer demand and customer inventory reductions." (Statement) The company said its Enterprise Mobility Solutions and Home and Networks Mobility businesses "continued to perform very well in a challenging environment."
Motorola expects a net loss of 7 cents to 8 cents on sales of $7.0 to $7.2 billion. The company will report its quarterly results on Feb. 3.