Motorola, the world's number two mobile phone maker, will shed 3,500 jobs in an effort to stem falling profits.
Chief Executive Ed Zander revealed the job cuts after profits at Motorola almost halved in the three months to the end of 2006.
Fourth quarter profits tumbled 48% to $624m (£316m; 482m euros) from $1.2bn at the same time last year.
The fall in profits reflects cuts in mobile phone prices and tougher competition among premium products.
Illinois-based Motorola has 23% of the global mobile phone market, but lags behind Finland's Nokia.
Price pressure
Motorola blamed "an unfavourable geographical and product-tier mix" for the decline in profits.
Mr Zander said the fourth quarter of 2006 had been disappointing.
Profits at the group declined despite a 23% increase in the number of handsets it shipped in the quarter, underlining the price pressures faced by mobile phone makers.
The company shipped 66 million handsets during the period.
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