Moto swings axe again: 4,000 more to go

US manufacturer Motorola is to cut an additional 4,000 jobs in a bid to turn the flagging company around, the firm said late Wednesday.

The latest round of cuts are in addition to the previously announced reduction of 3,500 workers, which is expected to be completed by June 30 and will save the troubled company $400m per year.

The additional cutbacks are expected to achieve another $600m in annualised cost savings in 2008, Motorola said.

First quarter loss at the company fell to $181m, dragged down by the flagging performance of the handset division. The world’s second largest handset manufacturer said that sales in the Mobile Devices segment came in at $5.4bn, down 15 per cent compared with the year ago quarter. The beleaguered unit also incurred an operating loss of $231m, compared with operating earnings of $701m a year ago.

On Wednesday, Tom Meredith, chief financial officer at Motorola, said: “Long term, sustainable profitability is — and always has been — Motorola’s top priority.

“Today’s actions are an update to the commitment we made during our first quarter earnings conference call — to drive out additional costs.”

In connection with the announcement, the company expects to record additional restructuring charges of approximately $300m, primarily due to severance and related expenses resulting from the workforce reductions.

Motorola also confirmed that billionaire corporate raider, Carl Icahn, failed to win a seat on the board. The news is a mere formality, Moto announced preliminary results of shareholders votes earlier this month.


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