Motorola forced to cut jobs worldwide

Motorola forced to cut jobs worldwide
“Too early to say if job cuts will hit Europe,” says strategic communications director. David Manners. Motorola is to shed one tenth of its 150,000 global workforce over the next year and warned of a possible operating loss in the second quarter. The cuts will reduce annual costs by $750m. The company blamed deteriorating demand and weakening prices, particularly in its semiconductor business which is expected to show a ‘severe’ loss in the third quarter. The job cuts will hit hardest in the semiconductor, paging and computer areas. Further cut-backs are expected next month in the communications equipment businesses. “It’s a continuation of what we’ve been doing in consolidating manufacturing and completing the transformation from being a component supplier to being a systems solution supplier,” said Ken Phillips, director of strategic communications at Motorola. Phillips added that it was too early to say what proportion of the cuts would fall on Europe. He said most of the cuts would be implemented by voluntary departures and attrition. “1998 will be a tough year – the year the crunch comes,” said Malcolm Penn, chairman of analysts Future Horizons. “The market hasn’t recovered, the coffers are dry – it’s time to step up to the bar. Motorola have been prudent and responsible in acting now. I expect it is the first of many such announcements. It’s surprising that others haven’t done the same thing – they’re going to have to.” Jim Eastlake, Dataquest vice president for Europe, reckoned: “It’s an example of the industry trend to focussing more on the value of design and less on making lots of chips. Companies are realising that intellectual property is the key value.” Recently Barry Waite, formerly head of Motorola in Europe now CEO of silicon foundry Chartered Semiconductor, told EW that the advent of foundries means that “semiconductor companies no longer see manufacturing excellence as their competitive advantage”.


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