In January, Motorola announced plans to cut 3,500 jobs by June 30 in an effort to save $400 million in annualized costs for 2007, now the company said it plans to cut another 4,000 jobs to achieve a 2008 annualized cost savings of $600 million. Motorola said "prioritization of investments, continuing discretionary-spending controls, general and administrative expenses and site rationalization" would also contribute to the $600 million in savings. The Wall Street Journal noted that these combined job cuts are equivalent to about 10 percent of the company's overall workforce as it stood at the end of last year. The cuts follow recent layoffs at IBM, Sprint, Nortel and Alcatel-Lucent, among others.
UBS Wireless Equipment stated, "While we are encouraged by recent new product launches and additional cost cuts to drive margin recovery, we believe Motorola may not command the same pricing power as it once had for newer products, potentially placing risk to our sales forecasts for 2007/2008. While cost cuts should help margins, we view top line growth as more critical to sustainable cash flow."
For more on the latest Motorola cuts:
- see this press release