Motorola Sees $101 Million Second-Quarter Charge for Job Cuts
Motorolasaid it expects to incur a net pretax charge of $101 million in the second quarter in
connection with its previously announced work-force reductions.
The world's second biggest mobile phone maker has been cutting jobs in an effort to reduce costs as it lost market share to rivals such as market leader Nokia in recent quarters due to a lack of advanced phones and competitive pricing.
Motorola , which on May 30 revealed plans for additional job cuts of 4,000 on top of 3,500 previously announced cuts, had said it would take restructuring charges of $300 million, or 8 cents per share, for the rest of 2007 due to the cuts.
It said in a filing with the Securities and Exchange Commission that it had taken "specific actions" in the second quarter that would affect 2,100 employees. It did not elaborate on those actions.
Motorola said that $115 million in related charges were slightly offset by $14 million in reversals for accruals from prior periods that were not longer needed, bringing the net amount to $101 million.
The majority of employees affected by the job cuts are in the United States, Germany and Canada and in all three of Motorola's business units.
Motorola also said additional severance charges for the remaining job cuts which had not yet taken place will continue through the remainder of the year. It did not give projections for specific quarters.