Asian economic crisis hits Motorola

Asian economic crisis hits Motorola
Tom Foremski
As expected, Motorola announced its first loss in 13 years, saying that fiscal second quarter sales were hit hard by the Asian economic crisis.
Motorola reported a net loss of $1.33bn compared with a profit of $268m for the same period last year. The loss was largely due to a $1.98bn charge for restructuring costs that include the closure of some business units and as many as 15,000 job cuts.
“As we indicated last month, the second-quarter results reflect further slowing of demand and continuing global pricing pressure, principally in the Semiconductor Products and Messaging, Information and Media segments and driven primarily by economic conditions in Asia,” said Motorola COO Robert Growney.
He warned that it would take several quarters before Motorola’s major restructuring would begin to show results with a goal of saving about $750m annually.

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