SCHAUMBURG, Ill.-Motorola Inc. said it would cut 1,900 jobs as part of its ongoing efforts to restructure and improve its supply chain. The company said it would take a pre-tax charge in the third quarter of $70 million for severance charges and $20 million in asset impairments related to the cuts.
A Motorola spokeswoman stressed that the job cuts were not due to financial difficulties but were part of the company’s efforts to improve its worldwide supply chain. The job cuts stretch across 29 locations in more than 20 countries.
“Motorola is a strong and growing company,” the company said in a statement. “The formation of an integrated supply chain is about operating more efficiently and delighting our customers. It is not about significant headcount reduction. As we have said before, we will be consolidating our supply-chain facilities over the next several years to strengthen our operating efficiency. We continue to hire in strategic areas such as engineering and marketing.”
Motorola earlier this year hired former IBM Corp. executive Stuart Reed to rework its global supply chain, an effort to make the company more nimble and efficient. At a Motorola analyst meeting in August, Reed promised to provide significant savings by reusing the same suppliers across various businesses, as well as reducing the number of the company’s suppliers. Reed also said Motorola would restructure its information-technology operations, outsource where appropriate, and develop a standard approach to product quality.
“Motorola does not have a best-in-class supply chain,” Reed said at the event.
Motorola already has offered evidence of its supply-chain work. The company recently announced the transition of its Korean manufacturing facility to a design center and the transition of its Elgin distribution and service operations to Communications Test Design.
Motorola will announce its third-quarter results Oct. 18.
