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Motorola posts Q3 loss, plans 3,000 job cuts

Motorola posts Q3 loss, plans 3,000 job cuts

Motorola posted a $US1.4 billion net loss for the third quarter of this year and said it plans to trim an additional 3,000 jobs by the end of the year, raising the total number of job cuts since last December to 39,000, according to a company spokeswoman.

Some of the 3,000 new job cuts will be realized through attrition, said Motorola, while the rest will be made through reductions worldwide. The cuts will leave the mobile phone maker with 108,000 employees.

In a statement, the company said its third-quarter adjusted loss was $153 million, or 7 cents per share, compared with earnings of $643 million, or 28 cents per share, in the same quarter last year.

Sales for the third quarter of this year fell to $7.4 billion, 22 per cent lower than the $9.5 billion in sales the company posted a year ago.

Motorola, like its competitors, is suffering from a slowdown in demand for wireless phones and equipment. In addition, according to Christopher Galvin, the company's chairman and CEO, the September 11 terrorist attacks on the US have also made it more difficult to predict when the market will rebound.

In the statement, the company said that its wireless handset business had returned to profitability and that it expects higher sales in the fourth quarter. Motorola said its market share in that business was up by between 17 per cent and 18 per cent over the same period a year ago, although sales were $2.7 billion, down 16 per cent from the year-ago quarter due to a decrease in demand for wireless handsets worldwide. Sales were up 8 per cent from the second quarter of this year, the company said.

The news, however, wasn't good for the company's semiconductor division. Motorola said sales in that division dropped 48 per cent from the third quarter of last year, to $1.1 billion. Due to declining sales, the company had a $355 million operating loss for the quarter just ended, compared with earnings of $202 million for the same period last year.

Brownlee Thomas, an analyst at Giga Information Group, said that for Motorola to increase its revenue, it should reduce costs as quickly as possible, in part by focusing on core businesses such as its handset division and wireless networking unit.

"The company can't be all things to all people," she said.


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