Motorola (NYSE: MOT) will take a $101 million charge for lay-offs of employees due to under-performance in its handset unit. The charge reflects the departure of 3,500 staff. The company has announced that another 4,000 will go, so the financial impact is likely to grow.
The company's CEO Ed Zander is, of course, keeping his job, despite the efforts of Carl Icahn.
There is a good chance that things at Motorola could get worse, and get worse fast. RBC Capital has cut its estimate of the number of handsets the company will sell in Q2 from 46 million to 40 million. It also cut Q3 forecasts to 45 million against a Wall St. consensus of 47 million.
All this unit cutting clearly means that there is a good chance that Motorola's revenue for the second quarter will fall well below the hopes of Wall St. and that the stock could move down further from its current sub-$18 price.
Zander could lose his job, even if it means he is the last employee out the door.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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