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Motorola slashes 7,000 jobs in mobile unit

The mobile phone manufacturer cuts jobs in its global cell phone division in an effort to reduce costs in a time of sluggish sales.

Mobile phone manufacturer Motorola on Tuesday said it is cutting 7,000 jobs in its global cell phone unit to reduce costs in its wireless handset business during a time of sluggish sales.

The reductions will affect all parts of the business, across all global regions, and they are expected to be completed in the next two quarters, the company said in a statement. This latest round of layoffs in the cell phone division brings the total to 12,000 since December.

The company also said it will attempt to cut costs by taking a charge against first-quarter and second-quarter earnings. No further financial details were available. Motorola has already warned of a first-quarter shortfall in sales and earnings.

Over the last two quarters, the Libertyville, Ill.-based company has moved to cut costs and revamp its business to stay viable during the current market flux. It has seen its market share slide in recent months.

Makers of mobile phones have been taking hits lately as sales have slowed from their torrid pace. On Monday, for instance, Sweden's Ericsson said it expects a pretax loss of as much as $507 million for the first quarter, rather than the nearly break-even results it had earlier forecast.

Motorola has trimmed its wireless handset portfolio and its supply chain, closing certain manufacturing facilities, selling off stakes in external business ventures and establishing global outsourcing agreements, the company said.

"Unfortunately, this was a necessary step for us to achieve renewal and stay competitive in today's dramatic business environment, particularly given the current slowdown in the economy," said Mike Zafirofsky, president of Motorola's Personal Communications Sector.