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Motorola cutting more jobs
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December 18, 2001: 6:25 p.m. ET
Motorola to cut another 9,400 as it struggles to get back in the black.
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NEW YORK (CNN/Money) - Motorola Inc. said Tuesday it was cutting 9,400 more jobs, on top of 39,000 cuts announced earlier, as the cell phone maker struggles to stem losses and return to profitability next year.
Motorola (MOT: Research, Estimates) said it is cutting 8,100 jobs in its semiconductor products business and a further 1,300 jobs across its equipment manufacturing business. The move is expected to save the company $865 million next year and more than $1 billion a year thereafter.
That brings the total number of job cuts since August 2000 to 48,400, or 32 percent of its peak workforce of 150,000.
The company also said it is comfortable with the fourth-quarter loss of 4 cents to 5 cents a share excluding items that it forecast in October and with Wall Street forecasts for profits of 15 cents a share for 2002, also excluding certain items.
Motorola Chairman and CEO Chris Galvin said in a conference call Motorola expects to be profitable in the second half of 2002, with those earnings driving profitability for the year.
Motorola President and COO Bob Growney said in the call the goal could be reached without major divestitures.
Motorola said the cost cutting is necessary as it expects 2002 sales volume to be lower than 2001.
The company said next year's sales from ongoing operations could be 5 percent to 10 percent lower than in 2001 "due to reductions in capital spending by its customers for telecommunications infrastructure equipment in the wireless, broadband and wireline markets."
Motorola said the first quarter of 2002 will be lower than current analyst expectations, but stressed the Wall Street consensus number is not based on company guidance.
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The company said it sees a loss of 11 cents to 14 cents per share before certain items, with revenue declining about 14 percent sequentially to $6.2-to-6.4 billion. Analysts surveyed by First Call are currently forecasting a loss of 3 cents per share.
The company said analysts' models probably did not take the company's historical downward trend from fourth quarter to first quarter into account "in a complete way."
Motorola stock rose during the regular session but gave back all its gains and more and fell 36 cents to $16.25 in after-hours trading. 
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