Motorola confirms another 4,000 job losses
Published: 15 January, 2009
READ MORE: Motorola
As expected, Motorola has dramatically increased its job cutting program, and now plans to axe another 4,000 positions, or 6% of its workforce, on top of the 3,000 announced in October. Of the new losses, 75% will come from its handset division, though the cuts still do not come close to those expected by some analysts, who had looked for the unit to be halved in size. And some still believe action on that scale is necessary to keep Motorola's devices business afloat.
Continuing weak sales of handsets are, once again, the main factor in poor quarterly results, with Motorola warning of a loss for its 2008 fourth quarter, ahead of a results announcement on January 30.
"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-CEO of Motorola and head of the handset business, in a statement. "Together with these actions and the announcements made in the fourth quarter, the Mobile Devices business expects to recognize annual cost savings of approximately $1.2bn in 2009." Across the whole organization, the latest moves will generate $800m in cost savings, to add to the $700m targeted in October.
Jha claimed the company was on track with its creation of a new Android-based smartphone line, due to launch around mid-year, and likely to be a make-or-break offering from Motorola. "We are pleased with the positive response from our customers to these new devices," he said.
The company expects to report fourth quarter revenue between $7bn and $7.2bn, below analyst expectations of $7.5bn. Despite Q4 being the holiday buying season, Motorola shipped only 19m phones, down 54% on a year earlier and 25% on the less seasonally strong Q3. A Q4 net loss of 7-8 cents a share is forecast from continuing operations, including six cents of restructuring charges. Analysts had looked for a profit of three cents per share.
More MOTOROLA News
More HANDSET News
More LTE News
COMMENTS
Carrier Broadband Performance: Africa & Middle East
Carriers are using mobile broadband as their weapon of choice in the fight against the commoditization of voice and falling ARPU. This...
Voice over LTE: Market Analysis and Forecasts
VoLTE offer unique advantages in lowering a carrier's voice infrastructure economics and promises to improve voice quality, device...
Satellite Phones: Will Dual Mode Help the Phoenix Rise from the Ashes?
Satellite phones have followed an arduous path since their much-hyped launch more than a decade ago. The hype was followed by an e...
