AUSTIN, Texas — Motorola Inc. has outlined plans, announced in December, to eliminate 4,000 jobs from its Semiconductor Products Sector, with about half coming from the closure of front-end and back-end production facilities in Hong Kong and Japan. The company said it also plans to eliminate 20 percent of its 600 corporate officers at the vice president level and above.
Chief executive officer Chris Galvin will be responsible for identifying the approximately 120 officers whose jobs will be eliminated, said a spokeswoman at Motorola's headquarters in Schaumburg, Ill.
The reduction in corporate officers mirrors the 20 percent drop in sales at Motorola during the current downturn. To date, all of the company's layoffs have involved lower-ranked employees, and the spokeswoman said top management felt "a clear responsibility to eliminate management layers."
Motorola expects to have about 100,000 employees on its payroll by the end of this year, down from about 150,000 at its peak in August 2000. The job cuts are continuing at the company's Semiconductor Products Sector, which currently employs about 30,000 worldwide.
The semiconductor unit said Thursday (Jan. 10) it will cut 800 to 900 jobs by closing a test and assembly facility in Hong Kong's Silicon Harbor. It said it will also close an assembly facility in Sendai, Japan, and a smaller back-end facility in Austin, Texas, where the Semiconductor Products Sector is based. Test and assembly operations will be consolidated at existing sites in Kuala Lumpur, Malaysia and Tianjin, China.
A front-end production facility at Motorola's Tohoku Semiconductor operation in Sendai — at the same location as the assembly facility slated for closure — will be consolidated. An 8-inch production line there will be closed and moved to a 6-inch facility. While semiconductor companies normally phase out older lines that process smaller diameter wafers, Motorola said the 6-inch line at Sendai operates at higher rates. "The 6-inch line has more flexibility, the ability to supply the mix of products from our transportation automotive and standard products microcontrollers divisions," said a spokesman for the Semiconductor Products Sector.
The closures announced Thursday will take place over the course of this year, and will result in about 2,000 job cuts. The "majority" of the other 2,000 jobs to be eliminated will come from non-manufacturing positions within the semiconductor division, the spokesman said. Motorola previously announced plans to close three older front-end facilities in the Phoenix area.
"As things stand today, these are the closures that we expect over the course of this year," the spokesman said. "That should be it for the year."
By early 2003, barring an unexpected worsening of business conditions, Motorola expects to have consolidated front-end production at two fabrication facilities in Austin; one in Chandler, Ariz.; a gallium arsenide fab in Tempe, Ariz.; and at CMOS fabs in East Kilbride, Scotland; Tolouse, France; and Tianjin, China.
The announcements come a week after Edward Breen officially assumed the president and chief operating officer position at Motorola. Breen, viewed by Wall Street as capable of introducing efficiencies into Motorola's far-flung operations, earlier served as chief executive officer at General Instrument Corp., which Motorola acquired in January 2000.
