Senior officials at Motorola Israel believe that the number of jobs to be lost in Israel in the firings announced at the end of last week by Motorola Inc. (NYSE: MOT) will be minor, if any. Motorola, the world’s number two cellular phone maker after Nokia Corp. (NYSE; LSE; HEX: NOK), announced that it will cut 3,500, 5% of its global workforce, although the list of employees to be fired has not yet been drawn up, and therefore it is not yet clear which countries will be affected.
A senior source at Motorola Israel said that rather than firing staff, the company had recently taken on dozens of workers at its factory in Arad. The company is also moving ahead with plans to set up a global R&D center in the Jordan Valley, which will initially employ 350 engineers.
Motorola Israel’s spokesperson and management have avoided making any official comment on the projected job cuts, since the decision rests with the parent company in the US, which has not given any further details so far.
The job cull is part of the company’s efforts to trim $400 million in costs over two years, following what CEO Ed Zander described as a “challenging” fourth quarter. The cuts are expected to be completed by the middle of 2007. Motorola employs 67,000 worldwide, 3,800 of them in Israel. Based on its proportional size, Motorola should fire 200 people in Israel, although the actual figure will be a lot smaller.
The estimates as to the possible downsizing in Israel are based on the fact that most of Motorola Israel’s activity is not focused on the cellular market. Motorola does manufacture fixed mobile car phones in Israel but the bulk of its work and revenue is generated by the defense and institutional market. Its activity in the cellular sector, where most of the job cuts will take place, consists largely of importing handsets for Israel’s three main cellular networks.
Published by Globes [online], Israel business news - www.globes.co.il - on January 21, 2007
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