Heads continue to roll at Motorola Inc., with the network and telecommunication equipment maker reporting a 20 percent reduction in its high-level executive staff -- about 120 managers -- in an announcement preceding its annual earnings statement set for Jan. 22.
Motorola started cutting jobs in earnest in December 2000 and will have released 42,900 workers and transferred 5,500 employees by the end of 2002, the company said last month, when announcing it would layoff 9,400 workers this year. The elimination of positions ranked vice president or higher is included in December's layoff numbers, a Motorola spokeswoman said. The company had 150,000 employees in August 2000.
Motorola Wednesday also reiterated the guidance it gave in December for the fourth quarter of 2001. It expects a net loss of $0.04 to $0.05 a share.
Separately, a federal judge in the Supreme Court of New York on Monday ordered Motorola to pay US$300 million to Chase Manhattan Bank, a unit of J.P. Morgan Chase & Co., as a consequence of loan guarantees made in Chase's $800 million investment in the failed Iridium LLC satellite phone company.
Motorola helped form Iridium and launch its services in 1992, and owned about 18 percent of the company when it filed for bankruptcy protection. Iridium has since been resurrected as Iridium Satellite LLC, and began offering satellite communication services in March.
Motorola disputes that it owed $300 million from loan guarantees, contending that it signed a memorandum of understanding but not a legally binding obligation. Motorola plans to appeal the decision, the company said in a statement denying a breach of contract.
"The people who invested in Iridium LLC, or lent money to it, were very sophisticated investors,'' Motorola said. "`They knew the risks involved, It is not unlike when you drill for oil, there is always the potential of ending up with a dry hole."