Motorola is folding all its communications-related businesses into a new division called Motorola Communications Enterprise. The restructuring will help Motorola reach its stated goal of cutting 15,000 jobs over 12 months.
Last month Motorola said it would cut 15,000 jobs, or 10 per cent of its workforce, and take a $1.95 billion charge. At that time Motorola also warned investors about disappointing second quarter earnings.
Motorola?s second quarter numbers earlier this week turned out to be slightly better than revised estimates, though sales were down 7 percent at $7.0 billion and profits were a mere $6 million, compared with $392 million in the year-ago quarter.
The restructuring will combine Motorola?s cellular, space, land mobile, messaging, information, media businesses and others. Together, these divisions accounted for about two-thirds of Motorola?s $28.9 billion sales in 1997.
The new division will be headed by Merle Gilmore, who has been named president of the Communications Enterprise. Gilmore headed Motorola?s Europe, Middle East and Africa operations, before being named deputy to the CEO in April 1998.
Two of Motorola?s communications businesses, the cellular and paging divisions, had been singled out for job cuts, together with the company?s troubled semiconductor division. In a conference call with analysts on Wednesday, Motorola CEO Christopher Galvin said the company is now about halfway towards reaching the goal of 15,000 job cuts.
Motorola has been hit by the Asian economic crisis as well as difficulties in the semiconductor market. In May, Motorola ditched plans for its broadband satellite network Celestri, estimated to cost about $12.9 billion, and instead paid $750 million for a 26 percent stake in the rival Teledesic network.
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