7,000 jobs on the line at Motorola

The Associated Press
Wednesday March 14, 2001


CHICAGO — Motorola Inc. is eliminating 7,000 more jobs in its cellular phone division, bringing to 16,000 the number of cuts announced at the company over the past three months. 

The world’s No. 2 cell phone maker blamed the latest reductions Tuesday on the cooling economy, which has put a big chill on sales. 

Motorola’s work force has shrunk more than 10 percent since December as it heads toward the end of what it expects to be its first quarter since 1985 with an operating loss. 

The job cuts will take place by summer and will affect manufacturing, engineering and administrative jobs throughout its worldwide cell-phone operations, the Schaumburg, Ill.-based tech giant said. No breakdown was given. Motorola currently employs about 140,000 and has cellphone plants or offices in Illinois, Florida, Mexico, Europe, Asia and elsewhere. 

Todd Bernier, an analyst for Chicago-based Morningstar, said: “It’s a classic case of what’s bad for Main Street is good for Wall Street.” 

Motorola’s latest restructuring began at the end of last year, barely two years after it cut 20,000 jobs and took a $1 billion loss in 1998. 


Motorola was the world’s leading manufacturer of cellular phones until being overtaken by Nokia in late 1998. Its share of the booming global market sank to 13 percent by the end of 2000, according to the Gartner Dataquest research firm. Finland’s Nokia claimed a 34 percent share. 

Motorola had been slow to switch to digital phones and overestimated demand for fancy, expensive phones. 

The company eliminated 2,500 jobs at its cell-phone plant in Harvard, Ill., in January, a month after disclosing 2,870 layoffs in Iowa, Florida and Ireland. Last month, Motorola announced it was eliminating 4,000 jobs from its semiconductor business. 

Leif Soderberg, head of strategy for Motorola’s phone unit, said no further job cuts are planned. 

Industry forecasts for worldwide cellphone sales in 2001 have been scaled back from close to 600 million to the current 475 million or fewer. 

Motorola’s hopes for a recovery hinge on the success of a series of next-generation phones and other products it is introducing starting this month. 

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