Motorola To Cut 15,000 Jobs
Jun. 04, 1998
CHICAGO (AP) _ Motorola Inc., struggling to weather the Asian economic crisis, said Thursday it is eliminating 15,000 jobs over the coming 12 months.
Profits plunged 45 percent to $180 million during the first quarter of this year, and the giant electronics company warned that second quarter earnings also would be hit hard.
The 10 percent reduction in its worldwide work force is part of a series of steps the company is taking to improve its slumping financial performance.
``The goal is to generate annualized savings, once all actions have been implemented, of more than $750 million,'' said Robert L. Growney, Motorola's president and chief operating officer.
``In the fourth quarter of last year our forecast for 1998 called for higher sales growth and improved profitability, but that has not materialized,'' Growney said. ``It is clearly time to accelerate the implementation of our renewal plan.''
In addition to the layoffs, Motorola said it will consolidate manufacturing operations throughout the company, with emphasis on semiconductors, messaging, information and media segments.
The company also will dump poorly performing businesses.
Special charges will reduce earnings by $1.95 billion in the second quarter.
Even excluding the special charges, second-quarter earnings are expected to be well below Wall Street's forecasts, the company said.
It blamed ``deteriorating demand and global pricing pressure,'' particularly in semiconductors because of the Asian economic crisis.
The announcement was made after stock markets closed.