Motorola to cut 4,000 more jobs amid drop in sales

Motorola said it would cut 4,000 jobs in 2009, on top of the 3,000 it had announced last year. In addition, the company predicted a large drop in fourth-quarter 2008 sales.

The Schaumburg, Ill.-based company said that 3,000 of the new job cuts would come from its mobile devices division, with the rest coming from other parts of the company. Motorola also said that it expected revenue for the fourth quarter to be between $7 billion and $7.2 billion, down from Wall Street expectations of around $7.5 billion.  The company said it shipped 19 million handsets in the quarter, down sequentially from the 25.4 million it shipped in the third quarter and less than half of the 40.9 million it shipped in the fourth quarter of 2007. Motorola will announce its full fourth quarter results Feb. 3.

The troubled handset maker said it expects this new wave of cuts to save the company around $700 million in 2009, which is in addition to the $800 million it said it would save in 2009 from the previously announced job cuts.

Motorola has been in a period of uncertainty since it posted a $397 million loss in the third quarter and its handset division saw a 31 percent drop in revenue. The company decided at that point that it would freeze its plans to spin off the handset division, and would instead pursue a massive restructuring of its business. 

Co-CEO Sanjay Jha, the head of the mobile devices business, said during the third quarter earnings report that the company would focus on Android and Windows Mobile-based handsets. In December, Motorola said it would freeze U.S. pension plans, stop matching company 401(k) contributions, halt most salary increases for 2009 and cut executive pay.  

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