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Motorola to axe another 9,400 jobs by year-end 2002
Wireless technology giant Motorola on Tuesday said it is cutting another 9,400 jobs in efforts to return to profitability, and sees lower revenues in 2002 because of reduced spending by its telecommunications customers
Wireless technology giant Motorola on Tuesday said it is cutting another 9,400 jobs in efforts to return to profitability, and sees lower revenues in 2002 because of reduced spending by its telecommunications customers
The latest job cuts, to be completed over the next 12 months, brings the total announced by the world's second largest mobile phone maker this year to 48,400, including jobs shifted to other companies. That number is almost one third lower than its peak employment of about 150,000 people in August 2000.
The company, based in the Chicago suburb of Schaumburg, Illinois, said despite the expected sales decline from ongoing operations of 5 percent to 10 percent, its profits next year should be in line with analysts' estimates of 15 cents a share, according to Thomson Financial/First Call. Motorola is the latest telecom equipment firm to be hit by the prolonged slump in capital spending by carriers challenged by a slowdown in demand. That has led most companies in the industry to slash jobs and reduce financial forecasts.
Only last week, equipment giant Lucent Technologies Inc. warned that its fiscal first-quarter loss would be larger than Wall Street expectations and optical networking firm Ciena Corp. said its first-quarter sales would fall 30 percent to 40 percent. However, Nokia, the world's largest maker of mobile phones, said last month it expects group sales growth of about 15 percent next year as it benefits from sales of new Internet phones and gains market share.
Ericsson, the world's biggest producer of mobile networks, said in October it expects flat or falling network sales next year. It has linked its mobile phone business with Japan's Sony to survive the cut-throat competition.
On Tuesday, Motorola credited the expected 2002 profit to cost reductions, the job cuts, and improved gross profit margins in its mobile phone business. Motorola expects to take a one-off charge in the fourth quarter of 2001 to cover the cost of the latest round of lay-offs, but officials nevertheless insisted that the company was still on track for an estimated fourth quarter operating loss of 4/5 cents per share
Bureau Report
The company, based in the Chicago suburb of Schaumburg, Illinois, said despite the expected sales decline from ongoing operations of 5 percent to 10 percent, its profits next year should be in line with analysts' estimates of 15 cents a share, according to Thomson Financial/First Call. Motorola is the latest telecom equipment firm to be hit by the prolonged slump in capital spending by carriers challenged by a slowdown in demand. That has led most companies in the industry to slash jobs and reduce financial forecasts.
Only last week, equipment giant Lucent Technologies Inc. warned that its fiscal first-quarter loss would be larger than Wall Street expectations and optical networking firm Ciena Corp. said its first-quarter sales would fall 30 percent to 40 percent. However, Nokia, the world's largest maker of mobile phones, said last month it expects group sales growth of about 15 percent next year as it benefits from sales of new Internet phones and gains market share.
Ericsson, the world's biggest producer of mobile networks, said in October it expects flat or falling network sales next year. It has linked its mobile phone business with Japan's Sony to survive the cut-throat competition.
On Tuesday, Motorola credited the expected 2002 profit to cost reductions, the job cuts, and improved gross profit margins in its mobile phone business. Motorola expects to take a one-off charge in the fourth quarter of 2001 to cover the cost of the latest round of lay-offs, but officials nevertheless insisted that the company was still on track for an estimated fourth quarter operating loss of 4/5 cents per share
Bureau Report