Motorola to cut 3,500 jobs as profit plummets
Sunday, 21 January 2007, 06:00 Hrs
New York: Motorola Inc has said that it planned to cut 3,500 jobs, or five percent of its global workforce, as it reported sharply lower profits. The world's second largest mobile phone manufacturer, said Friday that net profit for the last three months of 2006 was $624 million, or 25 cents per share, down from $1.2 billion, or 46 cents per share, a year earlier. For the year, the Illinois-based company said it earned $3.7 billion compared to $4.6 billion in 2005. Profits per share fell to $1.46 per share from $1.81 per share a year earlier. Motorola said its outlook for 2007 is for sales of between $46 billions and $49 billion. Motorola CEO Ed Zander said the job cuts would trim some $400 million in costs over two years. But he added that the company was still on the right track as sales of its popular Razr line of mobile phones remained strong. "It's funny, I keep reading about Razrs being tired," he told analysts. "We sold more Razrs in quarter four than in any quarter we ever had. We now have sold over 75 million Razrs worldwide." Motorola said it shipped 65.7 million handsets in the quarter, up 47 percent from a year earlier, and its share of the global market rose to 23.3 percent, up almost one percentage point from the third quarter. The company's poor performance was largely blamed on falling phone prices amid stiff competition. The company had issued a profit warning earlier this month.