Motorola to cut 7,000 jobs

"These reductions will impact all business segments and corporate headquarters operations, and will lower manufacturing, research and development, and sales, general and administrative expenses," the company said.

The job cuts, which come in addition to previous reductions, are part of the company's efforts to cut costs by 20%.

"This comprehensive restructuring purposefully returns Motorola to approximately its mid-1990s size, the era prior to the excesses of the telecom and dot-com booms," said chief financial officer David Devonshire.

Return to profits

The restructuring is designed to help bring the company back into profit by the end of the year.

The company said it expected to achieve "profit in the third and fourth quarters of this year and be profitable for the full year" even though sales would come in 5-10% lower than during 2001.

"The restructuring will be substantially completed when the steps we are announcing today are fully implemented," said president and chief operating officer Ed Breen.

"This means our businesses will be sized to today's economic environment and our assets will reflect today's market values".

|nvestors reacted positively to the announcement, helping Motorola shares edge $0.11 higher to $14.15 by midday in New York.

Long-lasting difficulties

Motorola has suffered from sharp losses for about a year-and-a-half.

During the January to March period of this year, the company recorded a $174m loss after its revenues fell 20% from the previous winter to $6bn.

The weak results, which were announced during early spring, came despite a rise in Motorola's market share due to an overall slowdown in the telecoms market.

Analysts said consumers' unwillingness to switch mobile phones as often as had been hoped meant previous earnings predictions have been inflated.