SCHAUMBURG, Ill. – Communications device manufacturer Motorola today announced further cost reduction actions, primarily associated with the company’s mobile devices business.
Motorola will further reduce its workforce in 2009 by approximately 4,000 positions. This reduction will include approximately 3,000 positions associated with the mobile devices business and approximately 1,000 positions associated with corporate functions and other business units (Moto is also the top manufacturer of digital cable set top boxes). The workforce reductions announced today are expected to begin immediately and are in addition to the 3,000 workforce reduction actions previously announced during the fourth quarter of 2008.
“Today’s workforce reductions, plus other incremental cost-reduction initiatives, including those announced on December 17, 2008, are expected to result in additional annual cost savings of approximately $700 million in 2009. The savings from these actions, together with the $800 million of savings from other actions announced during the fourth quarter of 2008 are expected to result in aggregate cost savings of $1.5 billion for the company in 2009,” reads the press release. (All figures in U.S. dollars.)
“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. “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.”
“Additionally, we are making good progress in developing important new smartphones for 2009 and are pleased with the positive response from our customers to these new devices” added Jha.
During the fourth quarter, Motorola shipped approximately 19 million units. Sales were adversely impacted by continued weakness in end consumer demand and customer inventory reductions. The company’s enterprise mobility solutions and home and networks mobility businesses continued to perform well.
“Our broadband mobility solutions businesses remain strong, are substantial franchises and are continuing to perform very well,” said Greg Brown, president and co-CEO.
Total Motorola sales for the fourth quarter of 2008 are expected to be in the range of $7 billion to $7.2 billion.
The company’s full Q4 results will be released February 3rd.
