Motorola layoffs reach 10,000 mark
By Suzanne Deffree, Managing Editor, News - April 4, 2008
Motorola Inc in a filing with Securities and Exchange Commission (SEC) Thursday stated plans to cut 2,600 jobs, bringing the total number of employees laid off at the company to about 10,000 since the beginning of 2007.
Motorola, which last week announced it would spin off its struggling mobile devices business in an attempt to create shareholder value, is doing so as part of an announced $500 million cost savings plan.
The move follows on announcements from Motorola in January 2007 that it would slash 3,500 jobs and in May 2007 that it would cut an additional 4,000 jobs as it attempted to improve its ailing financial results.
As a result of the 2,600 job cuts, Motorola said in the SEC filing that it will take a pre-tax charge of $104 million in Q1. About $113 million of the charge comes from severance costs, partially offset by $9 million of reversals for accruals from prior periods that are no longer needed, the filing states.
In October 2007, Motorola announced that its layoffs had cost the company more than $300 million so far for the year.
Motorola said that its estimated Q1 charges are expected to result in future cash expenditures during 2008 and that all three of its business segments, as well as various corporate functions, are impacted by the workforce reduction plans.
Included in the 2,600 number are position cuts in Singapore announced earlier this week. Motorola said it will end manufacturing of mobile devices at its location in Singapore by year’s end, cutting about 700 employees, as it moves forward with plans to separate its mobile devices business.
The workforce reduction represents approximately 4% of Motorola’s 66,000 employee base, as recorded in its 2007 annual report filing, made in February.