Motorola is to close four more of its semiconductor plants and axe more than 2,500 jobs as customers ignore its products.
The company said it expects wireless handsets sales to be lower than it had originally hoped.
As it reported its first full-year operating loss since the depression of the 1930s, Motorola set out more details about its ongoing cost cutting measures.
The semiconductor plants are set to close over the next 15 months with one wafer fabrication facility and three assembly test facilities set to close. The plants are in Austin, Texas; Hong Kong; and Sendai, Japan.
The 2,500 jobs are already accounted for in the 9,400 company-wide cuts announced in December.
The company says it will be left with eight wafer fabrication and two test assembly facilities, after closing four facilities last year.
While Motorola said its restructuring should mean a return to profitability in the third quarter, it admitted that the market slowdown for mobile phones and semiconductors - its two main businesses - continued in the last quarter.
In the fourth quarter Motorola's mobile phone unit reported sales down 14 per cent while orders dropped 23 per cent. Its semiconductor operations saw sales down 41 per cent and orders down 36 per cent.
Adding to the company's woes, global handset unit shipments this year are expected to be at the bottom end of its original forecasts at around 420 million. Previous estimates were for between 420 million and 460 million units.
According to Motorola, last year's lower than expected handset sales of around 375 million has meant higher than expected inventory still awaiting sale, further impacting new shipments in 2002.
Motorola is the first of the big three handset vendors to announce results for the past quarter, with Nokia to follow on Thursday and Ericsson on Friday.
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