Motorola to cut 4,000 more jobs

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New York : Motorola will slash another 4,000 jobs, or an estimated 6 per cent of its workforce, and warned that it would have a fourth-quarter loss as sales of mobile phones were weaker than expected.

Analysts had been expecting a new round of job cuts at Motorola, after 6,700 employee departures in 2008, as the economic downturn and a slump in demand for mobile phones add more pressure on a company that had already been losing market share to rivals like Nokia.

Motorola said on Wednesday that the latest move brings its cost cuts to $1.5 billion for 2009 -- $700 million in new savings on top of a previously announced plan for $800 million in expense cuts.

It estimated its fourth-quarter net loss per share at 7 cents to 8 cents, including unusual charges of 6 cents a share, but warned that the loss could be even wider as it is still working out items such as impairment testing and income taxes.

The Schaumburg, Illinois-based company said its fourth-quarter revenue would range from $7 billion to $7.2 billion, compared with the average analyst forecast for revenue of $7.5 billion, according to Reuters Estimates.

Motorola's shares fell a penny to $4.10 after closing 21 cents lower, or almost 5 per cent, at $4.11 in regular trade on the New York Stock Exchange.

SPIRALING LOSSES

Motorola said it sold about 19 million handsets in the fourth quarter of 2008. That fell short of several analysts' estimates of 22 million and above.

Motorola, which had already dropped to fourth place in the global handset market in the third quarter with sales of 25.4 million, had sold 40.9 million in the fourth quarter of 2007.

It cited weakness in consumer demand as well as customer inventory reductions for its poor handset sales,

While this is in step with a warning from its strongest competitor, Nokia, that industry cell-phone sales were set to shrink by 5 per cent or more in 2009, analysts said Motorola's problems were much worse than its rivals'.

Avian Securities analyst Matthew Thornton said broad weakness in demand was compounded by Motorola's weak products.

"I'm sure they're faring a bit worse than some of the other tier-one manufacturers," said Thornton. "It's not going to get any easier in the next couple of quarters."