Wednesday, May 30, 2007

Motorola says to cut 4,000 more jobs (Reuters)

NEW YORK (Reuters) - Motorola Inc. (MOT.N), the world's second-biggest mobile phone maker, said it expects to cut an additional 4,000 jobs, bringing the total to 7,500 this year, as it works to reduce costs to return to profit.

Motorola, which posted a first-quarter loss on weak phone sales, said it expects restructuring charges of about $300 million, or about 8 cents per share, over the rest of 2007 as a result of the additional job cuts.

The latest cuts, which will be made by the end of the year, bring the total reductions to more than 11 percent of Motorola's work force of 66,000 at the end of 2006.

The company, which expects to complete its previously announced 3,500 job cuts by June 30, forecast $600 million in annual cost savings in 2008 as a result of the additional job cuts, other spending controls and site rationalization.

Motorola said it was on target to save $400 million from the lay-offs announced in January.

It said there would be no adverse effect on customer service or product quality as a result of the cuts.

Motorola, which has been losing market share to rivals such as market leader Nokia (NOK1V.HE) due to a lack of advanced phones and tough price competition, said in April that it would announce additional cost-cutting plans by June.

The company has said in recent months it was shifting its priorities to improving profitability from gaining market share at all costs.

Motorola stock rose to $18.46 in after-hours trade following the news, up 1 percent from its close of $18.28 on the New York Stock Exchange.

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