Mobile communications equipment maker Motorola Inc. (MOT), Monday revealed certain cost-reduction initiatives including 2,800 job cuts. In a regulatory filing, the company disclosed that it expects to incur about $110 million in the first quarter from these actions.

The cost-reduction measures include other exit-related activities, including the termination of contractual commitments and asset impairments, resulting in additional pre-tax charges of about $13 million in the first quarter of 2009.

The majority of the cash payments associated with these plans have occurred in the first quarter of 2009 with the remainder to be paid out in future quarters of 2009. The company noted that the cost-reduction initiatives will impact all of its business segments, as well as various corporate functions.

These charges, together with previously expected charges from job cuts, bring the pre-tax charge in the first quarter of 2009 to about $229 million, comprised of $216 million in charges for severance costs relating to approx. 5,600 employees and $13 million in charges for exit-related activities.

Motorola, which was dropped to fourth place in the global handset market in the previous quarter, was heavily affected, like other peers in the industry, by continued weakness in end consumer demand and customer inventory reductions.

Motorola recently said it would cut 4,000 more jobs in 2009 primarily in its mobile phone business, which adds up to the 3,000 job cuts revealed a month ago. The workforce reductions plus other incremental cost-reduction initiatives announced earlier is expected to result in an additional annual cost savings of about $700 million in 2009. Also, the company expects $800 million of savings from other actions announced during the fourth quarter of 2008.

For the fourth quarter, the Schaumburg, Illinois-based company reported a $3.6 billion loss for the fourth quarter, hurt by goodwill impairment charges and plunging mobile devices sales.

For the first quarter, Motorola expects a loss, which is wider than both last year's reported loss and analysts' current estimates. The company also suspended its quarterly cash dividends.

Motorola closed Monday's regular trading session at $4.69, up 13 cents or 2.85% on a volume of 18.45 million shares. In the after-hours, the shares further gained 3 cents. The stock has been moving in a range of $2.98 - $10.50 for the past 52 weeks, with an average daily volume of about 21.53 million shares for the past three months.

For comments and feedback: contact