After Cutting 7,000 Jobs, Motorola Inches Higher

Motorola (NYSE: MOT) rose to US$15.19, up 19 cents, in morning trading Tuesday after the company said it will cut about 7,000 more jobs in an effort to reduce costs in its wireless handset business.

The new job cuts, which will affect all locations of the business, bring the total number of cuts in the Schaumburg, Illinois, company’s personal communications division since December to 12,000.

The job cuts will be made over the next two quarters, and will be reflected in charges against first- and second-quarter earnings, Motorola said.

“Unfortunately, this was a necessary next step for us to achieve renewal and stay competitive in today’s dramatic business environment, particularly given the current slowdown in the economy,” said Motorola PCS president Mike Zafirovski.

The company expects to grow, “but at a slower pace,” Zafirovski said.

“We must continue to adapt our overall cost structure, workforce and production levels to a more competitive business model,” he said. “At the same time, we will continue to develop and deliver compelling new products and technologies to ensure the long-term health of our business.”

Motorola has been addressing the slowdown in business through job cuts, asset sales and other measures. In January, the company cut 2,500 jobs as it closed a manufacturing plant in Harvard, Illinois.

The company has said that it expects sales and earnings for the first quarter ending this month to be hurt by “significant weakness” in orders across all business lines as a “sharp economic slowdown” in the United States continues to put pressure on results.

Motorola rivals Nokia and Ericsson have also seen demand for their products fall. Sweden-based Ericsson earlier this year announced plans to stop making telephone handsets, outsourcing production in order to save costs.

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