Motorola - the world's number two mobile phone maker - will cut another 7,000 jobs as it struggles to strengthen its mobile phone unit in a slowing sales environment.
Motorola, which issued its own profit warning last month, said the job cuts raise the total in its mobile phone operations, or personal communications sector, so far this year to 12,000, or 36 percent of the unit's total employees at the end of last year.
The company, which employs 140,000 people globally and ranks behind Finland's Nokia in mobile phone output, said it will complete the job cuts in the next two quarters and take a charge against first- and second-quarter results.
"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," Motorola Personal Communications Sector President Mike Zafirovski said in a statement.
"We anticipate growth, but at a slower pace," he added. "We must continue to adapt our overall cost structure, work force and production levels to a more competitive business model."
Motorola said it is looking at a number of "promising opportunities" to improve second-half performance, including new strategic alliances, customer agreements and products.
Sales slow
Projected global mobile phone sales for the industry in 2001 have slowed drastically, from a forecast of 500 million to 600 million earlier this year to Motorola's recent below-500 million warning last month to Tuesday's sub-450 million rate supported by Siemens.
That would be only a 10-percent increase over the 410 million sold last year.
Analysts said Motorola and Ericsson also have been hurt by Nokia's aggressive push to gain market share by cutting mobile phone prices, something it has done while still making a profit. Low-cost phones, which Motorola and Ericsson have not been as successful with, account for about two-thirds of the market.
Erricson said in January it was pulling out of making its own cell phones and shedding thousands of jobs. Nokia remains the only major mobile maker not to cut first-quarter forecasts
