14 DAY TRIAL // As most of you are probably aware, Motorola isn't at the top of its game, losing precious ground in the mobile department every day. Since the company is having problems in other areas too, the decision that Motorola is implementing is an extremely harsh one. The main idea is that it will freeze its pension plan, for now, plus resort to massive cutbacks in the not so profitable areas and reduce its employees’ salaries.
Although Motorola’s spokeswoman, Jennifer Erickson, announced in October that plans were to save over $800 million at first, only now the means have been stated publicly. In addition, the company plans to save up to $100 million per year due to these cutbacks, so it's safe to assume that the measures are to be implemented for a long time.
Now that everyone fears the financial depression announced, Motorola has chosen to try to salvage only the sure things and play safely. This means that all unnecessary spending is to be drastically reduced. Firing and reducing salaries significantly are most likely to appear soon enough.
As an example, Motorola has stated that Co-CEOs Greg Brown and Sanjay Jha would see 25% salary cuts and all 2008 bonuses were to be reduced or not delivered at all. Furthermore, in 2009, things could be getting even worse.
Focusing on the most important cutback, the pension plan is to be suspended, since it is causing great money losses and until the contract is renegotiated, no money will be invested or taken out of this plan. The already retired employees will still be getting their pensions, of course, but other than that, all that money is blocked for now.
Moving on to pleasant news, Motorola announced that it would raise salaries and bonuses in the areas where the competition is most fierce, but mostly in countries where the law obliges it. Even so, the company will not risk losing valuable employees in the areas where the sales are high and where market improvements are foreseen, but in other parts and departments that are said to be about 3000 employee layoffs, 2000 of these in the mobile department.
All in all, the analysts are not very optimistic regarding Motorola's chances to raise the sum of money wanted. On the other hand, everyone seems to appreciate the effort the company is making. Everyone except for most of the employees, of course.