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.