Just one day after news broke that Motorola is cutting its mobile operating platforms from seven to three and amid speculation about thousands of layoffs, Motorola on Thursday said it will delay spinning out its mobile devices division.
Sanjay Jha, co-chief of Schaumberg, Ill.-based Motorola and CEO of mobile devices, said the unstable economy has forced the company to rethink its strategy.
“While our strategic intent to separate the company remains intact, we are no longer targeting the third quarter of 2009, primarily due to the macroeconomic environment, stresses in the financial markets, and the changes under way in mobile devices,” Jha said. “We have made progress on various elements of the separation plan and will continue to prepare for a potential transaction at the appropriate time frame that serves the best interests of the company and its shareholders.”
He also said in a conference call Thursday that the company will take drastic cost-cutting measures that will help the company’s plan to rebuild its mobile devices division and become more competitive.
Motorola said it plans to cut about $1 billion in annual expenses this year. Already it has reduced costs by $474 million in the first nine months of the year and expects to exceed $600 million in additional reductions this year. Although the company has not announced any layoffs, observers expect thousands of layoffs will be part of the cost-cutting.
Jha, who in August left his position as chief operating officer at Qualcomm and has only been in his new position for 90 days, said he’s ready for the work ahead of him.
“Although I’ve been here for only a short time, I understand the challenges and changes we need to make and how to address them,” he said during the conference call. “The reality is there is no quick…