Motorola will take additional pretax charges of $229 million for the first quarter, with the vast majority of those charges--$216 million--related to severance costs from thousands of layoffs.
Motorola is cutting around 5,600 employees in an effort to reduce costs. In January, Motorola had estimated its total pretax charges at $106 million, but that month the company also said it was cutting an additional 4,000 jobs, on top of 3,000 it cut in the fall of 2008.
Motorola hopes to save $1.5 billion in 2009 because of the job cuts. In addition to the cuts, Motorola has frozen U.S. pension plans, stopped matching company 401(k) contributions, halted most salary increases for 2009 and cut executive pay. The company posted a $3.6 billion fourth-quarter loss, and its long-struggling mobile devices division had an operating loss of $595 million, notably up from the $388 million operating loss it posted in the year-ago quarter.
While the company's handset division struggles to turn itself around, Motorola has watched its global handset market share plummet. Samsung eclipsed Motorola as the top U.S. handset maker last fall.
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