Although Motorola (NYSE: MOT) sold more RAZR wireless handsets in its latest quarter than ever before, the company will be shedding about 3,500 jobs according to CEO Ed Zander. This comes as Motorola's profits sank over 40% in its latest quarter even as the wireless giant shipped more phones than ever. Say it with me -- keep costs under control. Zander's past experience as an operational guru should bode well for MOT investors, as the guy apparently knows how to control costs and keep expenses down as most levels. But Motorola's mixed bag of results for its latest quarter smells of the earlier tenure of Chris Galvin more than operational expert Ed Zander.
The cuts will come from middle management as well (get rid of all that red tape!) and will comprise about 5% of Motorola's overall global employee base. The cost savings are estimated at $400 million annually as wireless handset profit growth is expected to soften significantly this year, even as volume ramps up a bit.
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