The company reported a first-quarter loss of $206 million, compared to earnings of $481 million for the same quarter a year ago. Revenue fell $1 billion to $7.8 billion in the period, which ended March 31. Motorola blames the worldwide downturn in IT spending.
"Although cash-flow from businesses, including net proceeds from investments, was positive in the first quarter, this quarter was a difficult one," said Robert Growney, Motorola's president and chief operating officer.
Motorola has been hit by slowing demand for its phone handsets and semiconductor products, as well as by the general slowdown in the US economy. Since December, it has announced the axing of 22,000 employees, in a bid to reduce operating costs.
Scotland shock A total of 3,200 workers at Motorola's Bathgate plant in the east of Scotland are the latest to face redundancy, their plight prompting intervention yesterday by prime minister, Tony Blair.
Motorola has been making redundancies across its business units, including semiconductor manufacturing. A Motorola representative told Macworld: "Our goal is to outsource manufacturing of our semiconductors to third parties."
He went on to disclose that Motorola continues to manufacture high-end PowerPC microprocessors itself. Motorola is one of two suppliers of PowerPC chips for Apple's products, the other being IBM.
BBC Online claims Blair held a 15-minute telephone conversation with Motorola's president, Chris Calvin, in an effort to stave off closure of the plant, which manufactures mobile phones.
Councillor Willie Dunn, chairman of West Lothian Council's Economic Development, said: "We need to make sure the plant is there for the future because all indications are that mobile phone manufacture is going to pick up in a couple of years."
Motorola sources stressed that no decision had been made. The Scottish government's enterprise and lifelong learning minister in the Scottish Executive, Wendy Alexander, said: "There has been a stay of execution."
IBM has been cited by analysts as one of the few hi-tech companies not to face adversity in the current IT climate. Analysts say this is linked to IBM's withdrawal from the personal-computer market last year, protecting it from the fall-off in PC sales.
Despite Motorola's woes, Apple, IBM and Motorola all gained slightly during yesterday's trading. Apple gained 7.3 per cent to close at $22.04; Motorola gained 13.04 per cent, closing at $13; and IBM rose 3.18 per cent during the day, closing at $99.05.