NEW YORK (AP) — Motorola said Monday it expects to take additional charges for the first quarter, bringing the total to $229 million before taxes.
The company, which is laying off thousands to cut costs, said in a regulatory filing that $216 million of the total charges are for severance costs related to roughly 5,600 employees. In addition, it is taking $13 million in other pretax charges for contract terminations, asset impairments and other items.
In a Jan. 21 filing, Motorola had estimated first-quarter charges related to severance would total about $106 million.
Motorola said most of the cash payments associated with its cost-cutting plans took place in the first quarter, with the remainder expected to be paid out during the rest of the year.
North America’s largest maker of telecom equipment in February posted a massive fourth-quarter loss as it recorded charges to reflect the shrinking value of its cell phone business. It also suspended its dividend, said its CFO had left and gave a disappointing forecast for the first quarter.
Motorola is trying to cut costs by $1.5 billion this year, mainly from its cell phone division. It announced 4,000 job cuts in January, in addition to the 3,000 it slashed in October.
When the job cuts are complete, around 12,000 workers will have left the company since December 2007, when there were 66,000 employees, an 18 percent reduction. Motorola also has frozen its pension plans and reduced executive pay.
Even with those efforts, Motorola has forecast a wider first-quarter loss than analysts had expected. Motorola, which has been struggling to revive its business in recent years, is now the No. 5 cell phone maker worldwide, with a 6.5 percent share.
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