3,500 jobs cut at Motorola

Published: Saturday, January 20, 2007 at 6:01 a.m.
Last Modified: Friday, January 19, 2007 at 11:34 p.m.

CHICAGO — Motorola Inc. said Friday it is cutting 3,500 jobs and taking other steps to reduce costs after misjudgments on pricing and sales forecasts for its high-end phones contributed to its least profitable quarter since 2004.

The move came as the world's No. 2 cell phone maker reported a 48 percent decline in fourth-quarter earnings, to $624 million, on a steep drop in profitability in the handset business.

Chief Executive Ed Zander announced the cuts at a specially called analysts' meeting in New York, saying Motorola can save about $400 million over two years by eliminating 5 percent of its work force. Facing stiffer competition from its rivals' new products, Motorola aggressively cut prices of its phones during the quarter, especially in emerging markets, to gain market share but at the expense of profit margins.

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