Moto to take additional hit of $110m in first quarter

Beleaguered US vendor Motorola is to take an additional pre tax hit of $110m for the first quarter of 2009, in relation to previously announced workforce reductions.

In a filing with the Securities and Exchange Commission (SEC), the company said this amount related directly to workforce reductions of approximately 2,800 employees.

But these charges, together with charges filed in January, bring the total pre-tax charge for the first quarter of 2009 to approximately $229m, Moto said, mainly relating to severance costs for approximately 5,600 employees. All of the company’s business segments, as well as various corporate functions, are impacted by these plans.

The continued presence of the US vendor in the global handset market looks shakier than ever, as the company reported a fourth quarter net loss of $3.6bn. Moto reported sales of $7.1bn for the final three months of 2008, down from $9.6bn in the same period last year, while loss plummeted to $3.6bn, compared to a profit of $100m in the fourth quarter 2007.

The troublesome Mobile Devices segment was to blame again, posting fourth quarter sales of $2.35bn, down 51 per cent compared with the year ago quarter. Operating loss for the handsets unit was $595m, compared to an operating loss of $388m in the year ago quarter. For the full year 2008, handset sales were down 36 per cent to $12.1bn, with an operating loss of $2.2bn, compared to an operating loss of $1.2bn in 2007.