Schaumburg, Ill. — Motorola will lay off 4,000 employees during 2009 due to slumping cellphone sales.
In a prepared statement, which included preliminary results of the fourth quarter, Motorola said the job cuts will include about 3,000 positions associated with the mobile devices business and around 1,000 positions associated with corporate functions and other business units.
The workforce reductions are expected to begin immediately and are incremental to the 3,000 workforce-reduction actions previously announced during the fourth quarter of 2008.
Today’s workforce reductions, plus other incremental cost-reduction initiatives, including those announced on Dec. 17, 2008, are expected to result in additional annual cost savings of approximately $700 million in 2009, Motorola said. The savings from these actions, together with the $800 million of savings from other actions announced during the fourth quarter of 2008, are expected to result in aggregate cost savings of $1.5 billion for Motorola in 2009.
“The actions we are taking today in our mobile devices business will allow us to further reduce our cost structure and positions us for improved financial performance in 2009,” said Sanjay Jha, co-CEO of Motorola. “Together with these actions and the announcements made in the fourth quarter, the mobile devices business expects to recognize annual cost savings of approximately $1.2 billion in 2009.”
In its preliminary fourth-quarter results Motorola’s mobile devices operation shipped approximately 19 million units. “Sales were adversely impacted by continued weakness in end consumer demand and customer inventory reductions,” the company said.
Total Motorola sales for the fourth quarter of 2008 are expected to be in the range of $7.0 billion to $7.2 billion. On a GAAP basis, Motorola expects a net loss from continuing operations.
The company will issue its fourth quarter results at 7 a.m. ET on Tuesday, Feb. 3.