plans to slice 4,100 employees from it payroll by the end of the year and pare another 4,300 employees in 2002, mostly in the semi-conductor division, in its drive to meet the wireless tech giant’s predicted return to profitability in the next 12 months.
The layoffs and other cost saving measures are expected to result in projected savings and cost avoidance of approximately $865 million in 2002 and approximately $1.1 billion on an annualized basis thereafter.
The company also announced it expects to achieve the estimates of fourth-quarter 2001 sales and earnings per share that it provided in mid-October. At that time, Motorola said that it expected fourth-quarter sales for ongoing operations to be flat to 3 per cent higher versus the third quarter of 2001. The company continues to expect to incur an operating loss, on a pro-forma basis, of 4 to 5 cents per share in the fourth-quarter of 2001.
With respect to profitability for the full year of 2002, the company said it expects to be profitable in 2002 and believes that it can achieve the consensus expectation of 2002 annual earnings of 15 cents per share, on a pro-forma basis.
“Based on our current view of investment community consensus expectations for the profitability of our different business segments for the fourth quarter, we expect the Commercial, Government and Industrial Systems and Personal Communications (wireless handsets) segments to exceed these current expectations, offset by lower than expected results in the Global Telecom Solutions and Broadband Communications segments,” said Robert L. Growney, president and chief operating officer. “The company’s semiconductor products and integrated electronic systems segments are expected to achieve results close to consensus expectations,”
Approximately 4,000 of its employees are now being notified that their positions will be gradually eliminated over the next year. Beyond these efforts, the company will also reduce its employee population by approximately an additional 1,300 employees across its equipment manufacturing businesses. The total of these actions is expected to result in a further reduction of approximately 9,400 employees company-wide, expected to occur over the next 12 months.