3,500 jobs are to be lost at the world’s second largest mobile phone maker, Motorola.

The announcement comes days after the company announced a slump of 48 per cent in its revenues to $624m as it cut prices across its range in a bid to keep up with Nokia.

Announcing the company’s results, CEO, Ed Zander, said: “We are very disappointed with our fourth-quarter financial performance.”The job losses amount to around five per cent of the company’s global workforce which Zander believes will save the company around $400m over the next two years.

Ovum analyst Martin Garner noted at the time that Motorola’s problems probably began during Q306, when Nokia and Motorola were locked in intense price competition. However, other analysts believe the problem is more to do with Motorola’s handset portfolio which is looking increasingly out-of-date. In a conference call with analysts Friday Zander acknowledged as much saying, “the area where we are missing is a very strong 3G product.”

Motorola said its 2006 net profits shrunk 19.6 per cent to $3.7bn compared with 2005. It expects sales between $10.4 and $10.6bn for Q107.

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