Motorola has announced a loss of $3.6bn (£2.4bn) for the last quarter of the year, and warned that the company's mobile division had fared particularly badly.
The huge loss compares with a $100m (£69m) profit last year. Motorola has suspended its dividend, and chief financial officer Paul Liska has resigned.
Greg Brown, Motorola's president of broadband mobility solutions, and Sanjay Jha, chief executive of mobile devices, said: "In the fourth quarter, we generated positive operating cash flow of $201m [£138m] and ended the year with total cash of $7.4bn [£5.1bn].
"In light of the economic climate and challenges we face, we have implemented aggressive measures to reduce costs and improve financial flexibility, particularly in mobile devices. The cost-reduction actions underway are expected to generate aggregate savings of approximately $1.5bn [£1.03bn] during 2009."
The mobile handset division fared particularly badly, with sales down 51 per cent compared with a year ago. The division lost $595m (£411m) in the quarter, compared to a loss of $388m (£268m) last year.
Motorola said ithat it is still committed to Windows Mobile, but is looking to phones using Google's Android operating system for future models.
"We continue to take appropriate action to address the downturn in the global economy as well as the challenges related to our current mobile devices portfolio," said Jha.
"We are aggressively developing innovative new products, and we are encouraged by the positive customer feedback on our smartphone roadmap."
By contrast Motorola's enterprise mobility solutions division saw sales up by four per cent at $2.2bn (£1.5bn) and sales at the home and networks mobility division fell by just five per cent.
The company said that it did not expect the next quarter to be much better, and that further losses are almost certain. The company announced it was cutting 4,000 staff in January.
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