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Motorola Cuts 7,000

Chicago-based telecommunications equipment maker Motorola plans to cut about 7,000 jobs and absorb $3.5 billion in charges as part of a company-wide restructuring move.

Hurt by a drop in spending on telecommunications gear, Motorola said the cuts were necessary to reshape the company after the excesses of the telecom and dot-com booms. The company said the latest cuts would end its ongoing belt-tightening maneuvers.

Over the long term, Motorola the cost reduction actions would reduce expenses by more than 20 percent and save $100 million for the remainder of 2002 and $700 million annually.

Motorola said the bulk of the $3.5 billion charge would be absorbed in the second quarter with the remainder to be spread out over the third and fourth quarters. It would reduce annual net income by $1.10 per share.

"This comprehensive restructuring purposefully returns Motorola to approximately its mid-1990s size, the era prior to the excesses of the telecom and dot-com booms," Motorola CEO Christopher Galvin said.