Motorola Inc.
(NYSE: MOT), the wireless handset and cell phone maker, announced
yesterday that it would be laying-off another 4,000 workers, in
addition to the 3,500 job cuts it announced in January, as part of its
continuing efforts to manage costs.
These new lay-offs, in conjunction with other cost-cutting measures,
are predicted to save the company $600 million in 2008, and the
previously announced workforce reduction will ultimately eliminate
another $400 million in costs.
The continuing efforts at Motorola to tighten the corporate belt are
described by company CFO Tom Meredith as an "update to the
commitment...to drive out additional costs," an initiative announced at
the company's first-quarter conference call.
Motorola is in need of cost controls as it posted a net loss in the
first-quarter of this year in the face of declining handset sales and
lackluster new cell phone models. The poor performance of the company's
stock, only a dollar off its 52-week low, led activist billionaire
investor Carl Icahn, who has a 2.9% stake in the company, to seek a
seat on its board in elections this month.
Icahn lost the election to the company-backed candidate, John A.
White, by a margin of about 13% but still received more than 700
million votes in the process. The election followed a series of
exchanges, primarily in letters to shareholders, between Icahn and
company management in which Icahn attacked what he saw as mismanagement
of the company, especially in comparison to rival Nokia (NYSE: NOK).
Motorola stock is basically unmoved, down .27%, on the news today.
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