Motorola cuts 3,000 jobs, delays spinoff of cell phone unit

Motorola Inc announced that it was cutting its global workforce by 4.5 per cent, or some 3,000 employees, and delaying the spinoff of its troubled cell phone unit.

Motorola, the largest US mobile phone manufacturer, announced yesterday the job cuts just hours after reporting a quarterly net loss of nearly $400 million and said more than two-thirds of the layoffs would be in the handset division.

The Schaumburg, Illinois-based company said it suffered a net loss of $397 million in the third quarter of the year after reporting a net profit of $60 million for the same period last year.

Motorola lowered its forecast for the remainder of the year but said its cost-cutting moves would result in annual savings of some $800 million next year.

The ailing company had 66,000 employees worldwide at the end of 2007 and the latest job cuts bring the total number of layoffs since January 2007 to 13,000.

It said separation of the struggling mobile phone unit from the rest of the company was now "targeted beyond 2009."

"While our strategic intent to separate the company remains intact, we are no longer targeting the third quarter of 2009," Sanjay Jha, Motorola co-chief executive and head of its mobile devices division, said in a statement.

Jha, who took over the mobile devices unit in August, attributed the delay to "the macroeconomic environment, stresses in the financial markets and the changes underway in Mobile Devices.

"As part of our plan to rebuild Mobile Devices, we have announced significant actions to accelerate the consolidation of our product platforms and refocus our investment and market priorities," he said.