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Motorola to lay off 4,000
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February 9, 2001: 1:40 p.m. ET
Job cuts are the latest move by the company in its cost-cutting effort
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NEW YORK (CNNfn) - Motorola said Friday it will lay off as many as 4,000 employees from its semiconductor division as it strives to beef up its bottom line.
The latest announcement of job cuts, part of a broader cost-cutting plan under which the company is reducing spending and consolidating its manufacturing operations, comes just weeks after Motorola said it will shutter its mobile-phone manufacturing plant in Harvard, Ill., and lay off its 2,500 workers.
Also in December, Motorola laid off 2,870 employees in Iowa, Florida and Ireland as part of a shift toward more outsourcing of its wireless handset production. In all, the Schaumburg, Ill.-based company's layoff announcements this year amount to roughly 7 percent of its total work force.
Motorola is the world's second-largest supplier of mobile phones and a leading semiconductor maker. Both those divisions have been struggling recently in the face of weaker demand for wireless hand  sets and a glut of inventory that is weighing across the entire chip industry.
Last month, Motorola logged fourth-quarter sales and profit that met the Street's expectations, but the analysts estimates had been drastically reduced over the course of the quarter. The company twice ratcheted down its financial targets, blaming weakness in its end markets.
In its earnings report, Motorola said that its semiconductor sales rose 7 percent in the fourth quarter to $1.9 billion, but at the same time orders slipped by 19 percent.
Executives also revised their outlook for 2001 semiconductor growth to between 10 percent and 15 percent from earlier projections of between 35 percent and 40 percent, mostly due to excess inventory sitting on warehouse shelves at many of its customers.
"Each of our business units and support organizations has reviewed its circumstances and is making the necessary adjustments to help the sector meet its goals," Fred Shlapak, president of Motorola's semiconductor division, said in a statement Friday.
"While job reductions are extremely painful, they are a necessary part of our cost-reduction needs," he said.
Shlapak said some of the cost-reduction measures in the semiconductor division will be completed in the first quarter, while others will happen later in the year, depending upon legal or regulatory requirements in various countries. The job reductions will be made through a combination of attrition and layoffs, he said.
Motorola (MOT: Research, Estimates) shares were down 66 cents at $19.16 in New York Stock Exchange trade Friday afternoon. 
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