Motorola Inc. prepared to lay off 1,900 employees at 29 different U.S. and international locations in an effort to improve operating efficiency, the company said Wednesday.
The cell-phone maker said the layoffs will be distributed over its facilities in more than 20 countries and began in July, when it announced a planned consolidation of its supply chain facilities over the next several years.
Motorola's work force will remain at about 68,000 since it is simultaneously adding staff in such areas as engineering and marketing, spokeswoman Jennifer Weyrauch said, reports Business Week.
Motorola, based in Schaumburg, Illinois, is trying to lift its operating margin, a key measure of profitability, to at least 13 percent in three years from about 11 percent in the most recent quarter. Edward Zander, the chief executive of the company, hired Stuart Reed in April from International Business Machines to better organize how Motorola works with vendors and manufactures goods.
"This initiative is one piece of them getting those margins up," said Richard Valera, an analyst with Needham & Co. in New York. "They've been showing a good trajectory there, but there's still a lot of execution to be done."
The job cuts will cost about $70 million, Motorola said in a filing with the U.S. Securities and Exchange Commission late Tuesday.
The company is converting a manufacturing plant in Korea and a distribution facility in Elgin, Illinois, into design centers, Weyrauch said. Jobs and costs are being cut in the automotive unit after it was combined with the government and enterprise segment earlier in the year, the company said in July, informs Herald Tribune.