Motorola has revealed that it is to close its Harvard manufacturing plant in North America, at the cost of 2,500 jobs over the next six months.

The news follows the company's target="_blank"> announcement on January 10 that, its fourth-quarter earnings for 2000 were $335 million, a 41 per cent fall from the year-ago figure. Motorola's move confirms suspicions that the pace of both the US slowdown and IT-market slump are picking up.

The shutdown is part of the company's long-term aim to boost supply chain efficiencies and financial performance. The company blames the poor performance in its semiconductor and personal communications divisions for its plummeting profits.

"In 2001, the Harvard manufacturing team lowered production costs, and improved quality," said Mike Zafirovski, president of Motorola PCS in an interview with BBC Online. "But we cannot competitively manufacture products when there is surplus global capacity at Motorola's lower cost sites."

Harvard's output will be distributed between Motorola's other lower-cost locations. The plant will continue to operate, but its 2,500 staff will be working in customer services rather than manufacturing. Motorola has a total workforce of 130,000.