Motorola is to shed up to 4,000 jobs from its semiconductor division this year - and more job cuts may follow.
Cuts will come from contract and temporary employees, people leaving, and both voluntary and involuntary severance programs, a company spokesman said. Motorola is also phasing out four of its older chip-manufacturing plants.
The effect of the lay-offs on G4 processor manufacturing is unclear.
Worldwide loses Ken Phillips, director of business communications for Motorola's Semiconductor Products Sector (SPS) described the job cuts as "an incremental reduction" that will affect all job categories and operations worldwide. The lay-offs will help Motorola "get its cost structure down to match current demand", Phillips added.
Of the four factories to be phased out, three are in the US and one in France, Phillips said. Workers at these factories won't lose their jobs, however, and will be placed in other manufacturing operations, he claimed. Like other factories, the plants to be phased out make a variety of chips including those used in the car, communications and networking industries.
Unhappy and painful The bulk of layoffs will occur in the first quarter of this year, and Motorola started informing staff Friday, Phillips claimed. "It's quite an unhappy place around here today. It's a very painful step. I hope we won't have to make any more layoffs." He added that Motorola couldn't promise that these will be the final layoffs needed in the division.
At issue are the excess chip-inventories most computer makers are still holding due to a drop in demand for PCs caused by a slump in the US economy. Phillips said: "They ordered a lot of product in the first half of last year. We hope to see a resumption in market growth in the second half of this year."
Motorola's fourth-quarter earnings announcement in January came after it issued a profit warning in December. The company blamed increasing manufacturing costs and operating expenses for slimmer profits, pledging to rein in expenses.