Motorola to cut another 2,400 jobs; on top of the 6,600 it has cut through the first of this year

Bloomberg ^ | 11-10-03

[Brian S]

11/10/2003

Motorola Inc., the world's second- largest maker of mobile telephones, will eliminate 2,400 jobs by the first quarter, on top of the 6,600 it has cut through the first nine months of this year.

The additional cuts will cost about $131 million in severance pay, Schaumburg, Ill.-based Motorola said in a quarterly report filed with the Securities and Exchange Commission. Motorola has already paid $328 million this year for the previous reductions.

Motorola, which has a plant in Elma, has discontinued product lines, exited businesses and consolidated operations as it has lost market share to rivals, including Finland's Nokia Oyj, the world's No. 1 maker of mobile phones. Chief Executive Officer Christopher Galvin said in September he would step down amid conflicts with the board over how to revive revenue.

Motorola had about 97,000 employees as of the end of last year.

Bloomberg News

[DustyMoment]

This is another devastating blow to the American telecommunications market. We are retreating and giving market share to foreign companies. Cell phone technology is a uniquely American development and it is disheartening that American companies don't seem to know how to lead the industry over offshore competitors like Nokia and Ericsson.

[RiflemanSharpe]

ping

[2 Kool 2 Be 4-Gotten]

Motorola had the lead in first generation cell phones. Nobody could touch them. Nokia (and others) ate their lunch when the market moved to 2G. A lot of this was due to their arrogant attitude with customers i.e. "don't tell us what you want, we'll tell you what you want". Nokia took exactly the opposite approach and it paid off big time. This is a case of a company that had it all and threw it all away. I'm sad for the people that lost their jobs, and they have management to blame. The WSJ on Friday said that Galvin's golden parachute is as yet not measurable in terms of dollars, but just once piece of it was valued at $13 mil, so he's obviously going to be just fine.

[harpseal]

Ping

On or off let me know

[traumer]

China says "THANK YOU" !

[KDD]

http://www.freerepublic.com/focus/f-news/1018445/posts

[Old Professer]

The average severance pay package is obviously worth $51,000; this against a savings of roughly $30,000 per employee each year offshore for Motorola.

Two years from now, their bottom-line should show a healthy growth while the tax benefit of the severance packages will just be expiring.

Hard to fault the logic.

[Lessismore]

One of the minor flaws of capitalism is that the founder's descendents get to run the company until they ruin it. Another rags to riches to rags in three generations story (well OK, not exactly to rags for Chris Galvin).

It's tough on the employee's careers though.

The best reform would be portability of pension benefits, so that employees can leave more easily when the gene pool is drained.

[farmguy]

Motorola went to a portable pension plan a few years back. People already covered by the traditional plan had the option of staying traditional (defined benefit) or converting to the new plan.

Motorola's retirement health care is not guaranteed so anyone looking to retire from there really can't count on that anyway.

[Euro-American Scum]

But, but, but. . . the recession is over. There are new jobs everywhere. Happy days are here again. How can this be? /sarcasm