Motorola’s Ax Ready: OC Operations Brace For Possible Layoffs
By ANDREW SIMONS
Motorola Inc.’s cost cutting could slice into its Orange County operations.
In December, Motorola said it planned to cut 9,400 jobs in 2002. Nearly half of those cuts are expected to come from the company’s semiconductor division, which has operations in OC.
So far, there’s no indication of the magnitude of potential cuts here. But workers have been hearing that Motorola’s two OC facilities should brace for layoffs.
“We’ve been hearing that Orange County will be hit hard,” said a company source who asked not to be named.
Motorola has 409 people at its Irvine and Anaheim facilities. Some are part of the company’s semiconductor sales force. Others work in administrative and support roles for various divisions of the Schaumburg, Ill.-based company.
“Anybody who’s not making their numbers or who’s not directly related to revenue is more likely to be hit,” the source said.
Motorola declined to comment about its plans in OC.
“I would say the layoffs are more or less proportionate to the locations,” Motorola spokesperson Margot Brown said.
Motorola has about 120,000 employees in all.
Like other chipmakers, the slowdown in semiconductor sales has hit Motorola hard. In the fourth quarter, Motorola posted a $90 million operating loss on $7.3 billion in sales,a drastic change from the same period a year ago when the company reported profits of $362 million on $9.8 billion in sales.
“(Last year) will go down in the history of the global telecommunications equipment and semiconductor industries as one of the most difficult years,” Christopher Galvin, Motorola’s chief executive, said in a statement.
OC chip companies have had their share of layoffs. The county’s three largest chipmakers,Conexant Systems Inc., Broadcom Corp. and Microsemi Corp.,have dropped 2,000 workers in the past year alone. Motorola once had a large presence in the Irvine Spectrum, where it owned a 210,000-square-foot wafer fabrication plant that Lake Forest-based Western Digital Corp. originally built in 1991. Motorola moved out of the facility in 1999.
Motorola officials said they have begun notifying employees,including some in OC,that their jobs would be phased out during the next year. The company also is shifting workers around, moving some from a major Austin, Texas, facility to other areas, including OC.
The company has slashed nearly 42,900 jobs since late 2000, more than a quarter of the company’s workforce of 150,000 at the time. The layoffs should save $865 million this year and $1.1 billion annually after that, according to Motorola.
The layoffs could end with this round.
Earlier this month, Motorola told investors it could be profitable by the third quarter: “If annual sales are near the high end of the company’s guidance range and the wireless handset and semiconductor industries meet growth expectations,” a company release stated.
Morgan Stanley & Co. raised its rating on Motorola to “outperform” earlier this month.
“We believe handset introductions, semi industry recovery and government sales strength could add positive cash flow and provide significant operating leverage,” the brokerage said in a research note.
