Motorola will cut a further 4,000 jobs in 2009, in addition to the 3,000 already slated to be cut.
The company announced Thursday it expected the latest layoffs to save an additional $700 million this year.
The mobile device group will bear the brunt of the cuts, reducing its workforce by 3,000. The remaining cuts will be distributed across other business divisions.
Handset sales have been badly hit by the economic crisis, which has led to weakened consumer demand and customer inventory reductions, Motorola said. The mobile devices division shipped around 19 million units in 2008.
Yet some divisions are performing well even in the current economic climate. "Our Broadband Mobility Solutions businesses remain strong [and] are substantial franchises," said Motorola co-CEO and president Greg Brown.
The company has estimated it will report revenues of between $7 billion and $7.2 billion when it releases its full-year results on February 3. Motorola ended 2008 with cash reserves of around $7.4 billion.